Program: B.

COM (Regular) Semester: IV

Course: ORGANIZATIONAL DYNAMICS Total Credits: 4
UE/IA: 70:30 L-T-P:

Course Outcomes
CO-1- Illustrate the applicability of analysing the complexities associated with management of individual behaviour in the
organization.

CO-2- Appraise leadership and followership skills through participation in experiential exercises
CO-3 - Describe and understand concepts and theories that are central to leadership and leadership
development
CO-4 – Examine the impact and influence of power & politics on organizational behaviour
CO-5- Describe the role of culture in determining effective Organizational perceptions and outcomes.

CO
Module Topics References/Activities/Flip Classes
Introduction to Organizational Dynamics Online References:
1. (12 Introduction to Organizations https://hbr.org/2019/11/the-ceo-100-2019-edition#the-best- CO 1
Hours) Meaning and Definitions of Organizations performing-ceos-in-the-world-2019
Why do Organizations exist
Nature of Management, Manager’s https://hbr.org/2019/11/the-leader-as-coach
Roles- Types of Managers- Changing
Hierarchies of Managers https://www.mindtools.com/pages/article/newLDR_50.htm
st
Emerging Challenges in 21 Century
– Managing Diversity, Career
Management, Talent Management, Text books:
Organizational Culture and Leadership, 5ed, Wiley; Fifth
Changing Demographics of
edition (2017)
Workforce, Changed Employee
Organisational Behaviour by K.Ashwathappa (HPH
Expectations, Globalization, Publication)
Technology Transformation,
Promoting Ethical Behavior and CSR,
Organizational Justice
 Module – 2
Leadership and Followership
2. 12 Meaning of Leadership
Hours
Leadership as a Partnership
Leadership as a Relationship
Leadership versus Management
The Impact of Leadership on
Organizational Performance
Leadership does make a difference
Online References:
https://hbr.org/2003/09/why-hard-nosed-executives-should-care- CO 2
about-management-theory
https://www.nytimes.com/2016/10/30/jobs/bossy-vs-buddy-two-
leadership-styles-each-with-its-place.html
https://www.theceomagazine.com/business/management-
leadership/how-to-adapt-your-leadership-style-to-suit-your-staff/

Leadership does not make a difference Text books:

a) Substitutes for Leadership Leadership Research Findings, Practice and Skills by
b) Leader Irrelevance Andrew J. DuBrin
Leadership Roles- Figurehead, Organisational Behaviour by K.Ashwathappa (HPH
Publication)
Spokesperson, Negotiator, Coach and
Motivator, Team Builder, Team Player,
Technical Problem Solver, Entrepreneur,
Strategic Planner
The Satisfactions and Frustrations of
being a Leader
Meaning of Followership
Types of Followers
Essential Qualities of Effective Followers
3. Module – 3 Online References:
12Hours Traits, Motives and Characteristics of Leaders CO 2
Personality Traits of Effective Leaders - https://www.forbes.com/sites/deeppatel/2017/03/22/11-powerful- &
General Personality Traits (Self traits-of-successful-leaders/#6d756da4469f CO
Confidence, Humility, Trustworthiness, 3
https://hbr.org/2019/12/are-you-adapting-your-leadership-strategy-
Assertiveness, Emotional Stability,
as-
Extraversion, Enthusiasm, Sense of your-startup-grows
Humor, Warmth)
Task-Related Personality Traits (Passion https://hbr.org/2019/11/the-leader-as-coach
for the work & the people, Emotional
Intelligence, Flexibility & Adaptability, Text books:
Internal Locus of Control, Courage) Organizational Power Politics: Tactics in Organizational
Leadership Motives – Power Motive, Leadership, Praeger Publishers Inc
Leadership Research Findings, Practice and Skills by
Drive & Achievement Motive, Strong
Andrew J. DuBrin
Work Ethic, Tenacity, Resilience)
Cognitive Factors & Leadership – General
Mental Ability, Knowledge of the Business
or Group Task, Creativity, Insight into
People and Situations, Farsightedness and
Conceptual Thinking, Openness to
Experience
The strengths and Limitations of the Trait
Approach
 Module 4: Online References: CO 4
4. Organizational Power & Politics https://hbr.org/cover-story/2019/09/gender-equality-is-within-our-
12Hours Power – Meaning reach
Dynamics of Power – Distribution,
Dependency, Uncertainty, Compliance, https://hbr.org/2014/12/understanding-new-power
Indicators, Power determinants, Power
consequences, Influence, Sexual https://www.nytimes.com/2017/05/19/jobs/power-leaders.html
Harassment, Paraphernalia, Reputation &
Power shifts Text books:
Sources of Power – Interpersonal Organizational Power Politics: Tactics in Organizational
Sources of Power & Structural Sources Leadership, Praeger Publishers Inc
of Power Organisational Behaviour by K. Aswathappa 12th edition,
Effective use of Power Himalaya Publishing House
Power Tactics – Individual and Intra-group
Tactics, Inter-group Power Tactics
Politics - Meaning, Essence of Politics
Types of Political Activities – Attacking or
Blaming Others, Selectively distributing
information, Using Experts, Controlling
information channels, Game Playing,
Forming coalitions, Increasing
indispensability, Association with line
executives, Controlling agenda, Managing
impressions
Pros & Cons of Organizational Politics
Ethics of Power & Politics
 Organizational Culture & Creativity Online References:
Meaning & Definition CO 5
5. 12 Cultural Dimensions - Levels of Culture https://hbr.org/2019/10/the-kind-of-creative-thinking-that-fueled-
hours (National Culture, Business Culture, wechats-success
Occupational and Organizational Culture),
Mechanistic & Organic Cultures, https://thebossmagazine.com/organizational-culture/
Authoritarian & Participative Cultures,
Dominant & Sub Culture, Strong, https://hbr.org/2019/12/build-a-culture-to-match-your-brand
Common, Weak & Unhealthy Culture
Culture Artifact’s
Sustaining the culture Text Books:
Effects of Culture What It Takes to Be a Leader with Passion: Stay Dynamic
Changing Organizational Culture in the Leadership Zone, UdayakumarGopalakrishnan,
Paperback – 2016, by Notion Press
Creativity in Organizations – Nature, Process
Organisational Behaviour by K. Aswathappa 12th edition,
Methods of enhancing Creativity – Himalaya Publishing House
Creative People, Organizational Support,
Organizational Culture, Diversity,
Exposure, Sufficient Time & Resources,
New Ideas, Divergent Thinking,
Cross Pollinate, Creative Goals.

Reference books:
Organizational Culture and Leadership, 5ed, Wiley; Fifth edition (2017)
Organisational Behaviour by K. Aswathappa 12th edition, Himalaya Publishing House

Leadership Research Findings, Practice and Skills by Andrew J. DuBrin

 Module 1

Introduction To Organisational Dynamics

Structure
1.1 Introduction
1.2 Introduction to Organisational Behaviour
1.2.1 Definition or Meaning
1.2.2 Features/Characteristics of Organisational Behaviour
1.3 Why Do Organisations Exist
1.4 Nature of Management
1.4.1 Manager’s Role
1.4.2 Types of Managers
1.4.3 Changing Hierarchies of Managers
1.5 Emerging Challenges in 21st Century
1.5.1 Managing Diversity
1.5.2 Career Management
1.5.3 Talent Management
1.5.4 Changing Demographics of Workforce
1.5.5 Changed Employee Expectations
1.5.6 Globalisation
1.5.7 Technology Transformation
1.5.8 Promoting Ethical Behaviour
1.5.9 Corporate Social Responsibility
1.5.10 Organisational Justice

1.6 Summary
Questions
Answers
1.1 Introduction

Organisations are as old as the human race itself. Archaeologists have discovered massive
temples dating back to 3500 BC that were constructed through the organised actions of
many people. The fact that these impressive monuments were built suggest that not only
did complex organisations exist, but that the people in them worked cohesively for common
causes.

We have equally impressive examples of contemporary organisations such as Hong Kong’s

new island airport at Chek Lap Kok, the Hiberria Oil Platform off the East Coast, North
America, and the complex network of computer connections — the Internet.

What, then, are these powerful constructs that we call organisations? They are groups of
people who work independently towards some purpose. Organisations are not physical
structures; rather, they are people who work together to achieve a set of shared goals.
People who work in organisations have structured patterns of interactions, meaning that
they expect each other to complete certain tasks in an organised way.

Who creates these organisations? Often an individual or a group of people, who believe
that they possess the necessary skills and knowledge, form an organisation to produce
goods and services. At times, several people form a group to respond to a perceived need
by creating an organisation. People with a lot of money may invest jointly to build a
vacation resort. A group of people with similar beliefs may build a new place of worship
or citizens of a State may float a new political party.

1.2 Introduction to Organisational Behaviour

Organizational behaviour (often abbreviated as OB) is a field of study that investigates

how individuals, groups, and structure affect and are affected by behaviour within
organizations. Behaviour refers to what people do in the organization, how they per- form,
and what their attitudes are. Because the organizations studied are often business
organizations, OB is frequently applied to address workplace issues such as absenteeism,
turnover, productivity, motivation, working in groups, and job satisfaction. Managers often
apply the knowledge gained from OB research to help them manage their organizations
more effectively.

1.2.1 Definition or Meaning

• OB is the study of human behaviour;

• The study is about behaviour in organisations; and
• Knowledge about human behaviour would be useful in improving an organisation’s
effectiveness.

Combining the above three features, OB may be understood to be the study of human behaviour
in organisational settings, of the interface between human behaviour and the organisation and
of the organisation itself. Knowledge gained from such a study is useful in improving
organisational effectiveness. The following definitions are appropriate:

“OB refers to the behaviour of individuals and groups within organisations and the interaction
between organisational members and their external environments.”

“OB is a field of study that investigates the impact that individuals, groups and structure have
on behaviour within organisations for the purpose of applying such knowledge towards
improving an organisation’s effectiveness.”

1.2.2 Features/Characteristics of Organizational Behavior

1. OB provides a road map to our lives in organisations. Every one of us has an inherent
need to know about the world in which we live. This is particularly true in
organisations, as they have a profound effect on our actions and behaviours.
2. the field of OB uses scientific research to help us understand and predict
organisational life. This is not to say that this knowledge is absolute. The decisions
and actions that people in organisations make are determined by a complex
combination of factors. Besides, the field of OB is not a pure science. Nevertheless, it
helps us make sense of the workplace and, to some extent, predict what people will do
under various conditions.
3. OB helps us influence organisational events. Though it is good to understand and
predict organisational events, most of us want to influence the environment in which
we live. Whether one is a marketing specialist or a computer programmer, he or she
needs to know how to communicate effectively with others, manage conflict, make
better decisions, ensure commitment to ideas, help work teams operate more
effectively and the like. OB theories and concepts will help us influence
organisational events.
4. OB helps an individual understand himself/herself and others better. This helps
improve interpersonal relations considerably. Of particular significance are topics like
attitude, perception, leadership, communication, TA and conflict, an understanding of
which will change the very style of talking and functioning of an individual. It is no
exaggeration that the MBA graduate always remember
5. A manager in a business establishment is concerned with getting things done through
delegation. He or she will be successful when he or she can motivate subordinates to
work for better results. OB will help the manager understand the basics of motivation
and what he or she should do to motivate subordinates.
6. The field of OB is useful for maintaining cordial industrial relations. If an employee is
slow in his or her work, or if his or her productivity is steadily declining, it is not
always because of denial of promotion or a poor work environment. Similarly, if the
union of workers gives a strike call, the basic issue may not be a demand for more
wages, higher bonus, a better canteen, or for three pairs of uniform in the place of
two. Often the indifferent attitude of the boss makes the worker lazy. Similarly,
 reluctance of the management to talk to union leaders about issues might provoke
them to give a strike call.
7. The subject of OB is also useful in the field of marketing. In the dynamic mechanism
of the flow of goods and services from producer to consumer, awareness of the nature
of individual and social processes has an immediate or long-range contribution to the
success or failure of the enterprise. Consumer choice behaviour, the nature of
influence, and the channels involved, represent leading topics for behaviour research
in this area. Innovation and the diffusion of new products, creativity, and the learning
of responses are equally important social and individual phenomena that contribute to
the total process.
8. The most popular reason for studying OB is that the reader is interested in pursuing a
career in management and wants to learn how to predict behaviour and apply it in
some meaningful way to make organisations more effective. A successful manager
should have good ‘people skills’ which include the ability to understand one’s
employees and use this knowledge effectively to make them more efficient.
9. OB adds to the bottom-line of an organisation. Principles of OB, if applied
effectively, will help motivate and retain talent. Motivated talent contributes to
productivity and profitability. Every manager is interested in motivating his or her
subordinates. He or she plays the role of OB expert while inspiring individuals to do
better and better.
10. In the last couple of years, our economy has been witnessing an upward trend; every
sector of the economy doing pretty well, registering a modest growth rate. In order to
sustain this trend, effective management of all sectors of the economy, particularly the
industrial sector, is of paramount importance. Effective management does not mean
competent utilisation of technical or financial resources alone. Rather, it implies
efficient management of human resources. This is where OB comes into the picture. It
is a discipline which enables a manager to motivate his or her subordinates towards
higher productivity and better results.

1.3 Why Organisations Exist

1. To Increase Specialisation and Division of Labour: People who work in
organisations may become more productive and efficient at what they do than people
who work alone. For many kinds of productive work, the use of an organisation allows
the development of specialisation and division of labour. The collective nature of
organisation allows individuals to focus on a narrow area of expertise, which allows
them to become more skilled or specialised at what they do.

There are several firms, such as Wipro, TCS, Infosys, IBM, Apple and Facebook which
have provided enabling environments for individuals to enhance their skills for
organisation and individual growth.

2. To Use Large-Scale Technology: Organisations are able to take advantage of the

economies of scale and scope that result from the use of modern automated
computerised technology. Economies of scale are the cost savings that result when
goods and services are produced in large volumes by automated production. Economies
of scope are the cost savings that result when an organisation is able to use underutilised
resources more effectively because they can be shared across several different products
or tasks. Economies of scope (as well as of scale) can be achieved, for example, when
it is possible to design an automated production line that can make different types of
products simultaneously.
 3. To Manage the External Environment: Pressures from the environment in which
organisations operate necessitate organising productive resources. An organisation’s
environment includes not only economic, social and political factors but also the
sources from which it obtains inputs and the marketplace into which it releases its
outputs. Managing complex environments is a task beyond the abilities of most
individuals, but an organisation has the resources to develop specialists to anticipate or
attempt to influence the many demands from the environment. This specialisation
allows the organisation to create more value for itself, its members, and its customers.

4. To Economise on Transaction Costs: When people co-operate to produce goods and

services, certain problems arise as they learn what to do and how to work with others
to perform a task effectively. People have to jointly decide who will do which tasks (the
division of labour), who will get paid what amounts, and how to decide if each worker
is doing his or her share of the work. The costs associated with negotiating, monitoring
and governing exchanges between people are called transaction costs. Organisation’s
ability to control the exchanges between people reduces the transaction costs associated
with the exchanges.

5. To Exert Power and Control: Organisations can exert great pressure on individuals
to conform to task and production requirements in order to increase production
efficiency. To get a job done efficiently, it is important for people to come to work in a
predictable fashion, to behave in the interest of the organisation and to accept the
authority of the organisation and its managers. All these requirements make production
less costly and more efficient but put a burden on individuals who must conform to
these regulations. When individuals work for themselves, they need to address only
their own needs. When they work for an organisation, however, they must pay attention
to the organisation’s needs as well as their own. Organisations can discipline or fire
workers who fail to conform and can reward good performance with promotion and
increased rewards. Because employment, promotion, and increased rewards are
important and often scarce, organisations can use them to exert power over individuals.

Taken together, these five factors help explain why more value can often be created when
people work together, co-ordinating their actions in an organised setting, than when they work
alone. Over time, the stability created by an organisation provides a setting in which the
organisation and its members can increase their skills and capabilities, and the ability of the
organisation to create value additions by leaps and bounds. In the last 30 years, for example,
Infosys has grown to become the most powerful software company in the world because
Narayana Murthy, its founder, created an organisational setting in which people are given the
freedom to develop their skills and capabilities to create valuable new products.
1.4 Nature of Management

Management is a set of activities (including planning and decision making, organizing, leading,
and controlling) directed at an organization's resources (human, financial, physical, and
information) with the aim of achieving organizational goals in an efficient and effective
manner.

Efficient means using resources wisely and without unnecessary waste.

Effective means doing the right things successfully.

A manager is someone whose primary responsibility is to carry out the management process.
In particular. a manager is someone who plans and makes decisions, organizes, leads, and
controls human, financial, physical, and information resources.

1.4.1 Manager’s Role

Interpersonal Roles

A figurehead attends activities to represent the organization.

A leader encourages employees to improve productivity and shows them how to do it.

A liaison coordinates the activities of two or more people, groups of people, or organizations.

Informational Roles

A monitor actively seeks information that may be of value to the organization.

A disseminator transmits information to others in the organization.

A spokesperson transmits information about the organization to people outside the

organization.

Decisional Roles

An entrepreneur develops new ideas and initiates changes in the organization.

A disturbance handler handles problems that arise such as strikes, copyright infringements, and
energy shortages.

A resource allocator determines who should receive the available resources and who should
have access to the manager's time.
A negotiator represents the organization in a negotiation setting such as collective bargaining
for a union contract or developing an agreement with a consultant.

Managerial Skills

Technical skills are the skills necessary to accomplish or understand tasks relevant to the
organization.

Interpersonal skills are the ability to communicate with, understand, and motivate individuals
and groups.

Conceptual skills are the ability to think in abstract terms and the mental capacity to understand
the "big picture" or the overall workings of the organization and its environment.

Diagnostic and analytic skills are the ability to recognize the symptoms of a problem and then
determine an action plan to fix it.
1.4.3 Types of Managers

Managers are organizational members who are responsible for the work performance of other
organizational members. Managers have formal authority to use organizational resources and
to make decisions. In organizations, there are typically three levels of management: top-level,
middle-level, and first-level. These three main levels of managers form a hierarchy, in which
they are ranked in order of importance. In most organizations, the number of managers at each
level is such that the hierarchy resembles a pyramid, with many more first-level managers,
fewer middle managers, and the fewest managers at the top level. Each of these management
levels is described below in terms of their possible job titles and their primary responsibilities
and the paths taken to hold these positions. Additionally, there are differences across the
management levels as to what types of management tasks each does and the roles that they take
in their jobs. Finally, there are a number of changes that are occurring in many organizations
that are changing the management hierarchies in them, such as the increasing use of teams, the
prevalence of outsourcing, and the flattening of organizational structures.

Top-Level Managers

Top-level managers, or top managers, are also called senior management or executives. These
individuals are at the top one or two levels in an organization, and hold titles such as: Chief
Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operational Officer (COO),
Chief Information Officer (CIO), Chairperson of the Board, President, Vice president,
Corporate head.

Often, a set of these managers will constitute the top management team, which is composed of
the CEO, the COO, and other department heads. Top-level managers make decisions affecting
the entirety of the firm. Top managers do not direct the day-to-day activities of the firm; rather,
they set goals for the organization and direct the company to achieve them. Top managers are
ultimately responsible for the performance of the organization, and often, these managers have
very visible jobs.

Top managers in most organizations have a great deal of managerial experience and have
moved up through the ranks of management within the company or in another firm. An
exception to this is a top manager who is also an entrepreneur; such an individual may start a
small company and manage it until it grows enough to support several levels of management.
Many top managers possess an advanced degree, such as a Master’s in Business
Administration, but such a degree is not required.

Some CEOs are hired in from other top management positions in other companies. Conversely,
they may be promoted from within and groomed for top management with management
development activities, coaching, and mentoring. They may be tagged for promotion through
succession planning, which identifies high potential managers.
Middle-Level Managers

Middle-level managers, or middle managers, are those in the levels below top managers.
Middle managers' job titles include: General manager, Plant manager, Regional manager, and
Divisional manager.

Middle-level managers are responsible for carrying out the goals set by top management. They
do so by setting goals for their departments and other business units. Middle managers can
motivate and assist first-line managers to achieve business objectives. Middle managers may
also communicate upward, by offering suggestions and feedback to top managers. Because
middle managers are more involved in the day-to-day workings of a company, they may
provide valuable information to top managers to help improve the organization's bottom line.

Jobs in middle management vary widely in terms of responsibility and salary. Depending on
the size of the company and the number of middle-level managers in the firm, middle managers
may supervise only a small group of employees, or they may manage very large groups, such
as an entire business location. Middle managers may be employees who were promoted from
first-level manager positions within the organization, or they may have been hired from outside
the firm. Some middle managers may have aspirations to hold positions in top management in
the future.

First Level Managers

First-level managers are also called first-line managers or supervisors. These managers have
job titles such as: Office manager, Shift supervisor, Department manager, Foreperson, Crew
leader, Store manager.

First-line managers are responsible for the daily management of line workers—the employees
who actually produce the product or offer the service. There are first-line managers in every
work unit in the organization. Although first-level managers typically do not set goals for the
organization, they have a very strong influence on the company. These are the managers that
most employees interact with on a daily basis, and if the managers perform poorly, employees
may also perform poorly, may lack motivation, or may leave the company.

In the past, most first-line managers were employees who were promoted from line positions
(such as production or clerical jobs). Rarely did these employees have formal education beyond
the high school level. However, many first-line managers are now graduates of a trade school,
or have a two-year associates or a four-year bachelor's degree from college.
1.5 Emerging Challenges in 21st Century

In today’s context organizations face umpteen number of challenges ahead of discharging their
duties. The complexities and adversaries make them more challenging and at the same time
vulnerable too. Organizations will have look forward to the issues of Managing Diversity,
Career Management, Talent Management, Changing Demographics of Workforce, Changed
Employee Expectations, Globalization, Technology Transformation, Promoting Ethical
Behaviour and CSR, Organizational Justice at their levels. This becomes even more
challenging given the competition prevailing at the global corridors. An organization if it has
to make a mark at the international arena will have to necessarily imbibe all the above-
mentioned challenges, face them and come out with a strategy to overcome the shortcomings
and go forward in order to compete in the global environment.

Organizational Challenges in 21st century:

Organizations today are going through the challenges of dynamic environment which requires
them to face recent changes and put effort for profit optimization. In today’s era, organizations
are coming across various challenges about 21st century human resource; that includes
employing new technology, globalization, everyday innovations, political as well as economic
instability and ethical & ecological challenges. Change management is one of the biggest
challenges of today’s era. The pre requisite for growth and survival of any organization is to
merge with internal and external changes. Hence, along with other important business units of
an organization the HR is also in a need to take the lead in keeping up with the required pace.

Organizations and corporations across the globe are growing and expanding locally, nationally
and internationally. Due to globalization, technology and innovation, and uncertainty in the
global market regulations and policy, organizations and corporations are focused on solving
some of the most concern challenges they face. They are working to better understand the
national and international market, its trends and culture, adapt to the government policy and
regulation nationally and globally, and become more innovative while still maintaining a sense
of control. They are trying to develop short-term strategies due to uncertainty while at the same
time they develop long-term technology tools and process being flexible and adaptive due to
rapidly changing in the technology and market complexity. The increasing diversity of
employees and customers is forcing the organizations and corporations to foster the expansion
of different ideas and viewpoints, develop cross-cultural communication strategies and develop
better system thinking capability to deal with the complexity and diversity. Maintaining
employees work-life balance is the key challenge in this regard due to which organizations and
corporations develop and adapt to strategies to ensure employees work-life balance.

Meaning of Diversity:
Diversity is about what makes each of us unique and includes our backgrounds, personality,
life experiences and beliefs, all of the things that make us who we are. Diversity is also about
recognising, respecting and valuing differences based on ethnicity, gender, age, race, religion,
disability and sexual orientation.

Diversity is differences in racial and ethnic, socioeconomic, geographic, and

academic/professional backgrounds. People with different opinions, backgrounds (degrees and
social experience), religious beliefs, political beliefs, sexual orientations, heritage, and life
experience. An example of diverse is a classroom full of students from many different cultural
backgrounds. Made up of distinct characteristics, qualities, or elements. Differing one from
another.

Diversity in the workplace refers to an organization that intentionally employs a workforce

comprised of individuals of varying gender, religion, race, age, ethnicity, sexual orientation,
education, and other attributes. It is all about creating an inclusive environment, accepting of
every individual's differences, enabling all employees to achieve their full potential and as a
result, allowing your business to reach its fullest potential.

Organizational Diversity:
Organizational diversity in the workplace refers to the total makeup of the employee workforce
and the amount of diversity included. Diversity refers to differences in various defining
personal traits such as age, gender, race, marital status, ethnic origin, religion, education and
many other secondary qualities.

Companies with greater workplace diversity achieve greater profits. Companies with a diverse
workforce make better decisions faster, which gives them a serious advantage over their
competitors. As a result, companies with diversity in the workplace achieve better business
results and reap more profit. Workplace diversity comes in many
forms: race and ethnicity, age and generation, gender and gender identity, sexual orientation,
religious and spiritual beliefs, disability and more. Increased diversity benefits employees at
both the individual and the group level. People become more satisfied in their work and are
more motivated to work with others. Groups become more creative and better at coming up
with unique, effective, and efficient solutions.
Dimensions of Diversity:
The dimensions of diversity include gender, religious beliefs, race, marital status, ethnicity,
parental status, age, education, physical and mental ability, income, sexual orientation,
occupation, language, geographic location, and many more components. The diverse world in
which we live is a composite of many cultures, values and ways of interacting with one another.
Understanding the dimensions of diversity and world cultures in Extension audiences will help
ensure the development of instructional competencies that will connect with groups and
individuals interacted with.

Barriers to Accept Diversity

• Prejudice - unjustified negative attitude towards a person based on his or her
membership of a particular group.
• Ethnocentrism - a tendency to regard one’s own group, culture, or nation as superior to
others. This is what sometimes occurs in a selective club, religious sect, or political
organization. People who are ethnocentric see their group-related customs or beliefs as
‘right’ and evaluate other, beliefs or practices against this yardstick.
• Stereotypes - set of beliefs about a group that is applied universally to all members of
that group, such as ‘all poor people are uneducated’ or ‘all Asians are good at maths’.
Stereotyping, whether positive or negative, is not good because seldom does one
statement hold true for all members of a group.
• Discrimination - barring an individual from membership of an organization or from a
job because of his or her membership of a particular group. An example of unfair
discrimination is the company that only interviews men for a position that requires a lot
of travel.
 • Harassment - consciously shunning or verbally or physically abusing an individual
because of membership of a particular group.
• Sexual harassment - approaching a person in an unwanted, uninvited, intimate way,
interfering with that person’s productivity or advancement.
• Backlash - negative reaction to the gaining of power and influence by members of
previously underrepresented groups, leading to fear, resentment, and reverse
discrimination.

How to manage inclusivity effectively:

Inclusion is where people's differences are valued and used to enable everyone to thrive
at work. An inclusive workplace has fair policies and practices in place and enables a diverse
range of people to work together effectively. Inclusion in the workplace has been an ever-
present ideology for organizations. One of the biggest challenges we have today is creating
diverse and inclusive environments in the workforce. It certainly is not impossible. However,
it is difficult for a number of organizations. Many organizations have figured out the diversity
aspect, but not inclusion. A positive inclusive environment embraces diversity, engagement,
and belonging. Organizations must embrace its employees to be their full authentic self.

1.5.2 Career Management:

The terms career, career planning, career development and career management need
clarification. Career is progress or general course of action of a person in some profession or
in an organisation. Elaborating further, career includes the specific jobs that a person performs,
the kinds of responsibilities and activities that comprise those jobs, movements and transitions
between jobs, and an individual’s overall assessment of and feelings of satisfaction.

Five stages in Career Progression are:

1. Entry to the organisation when the individual can begin the process of self-directed
career planning.
2. Progress within particular areas of work.
3. Mid-career when people still hope to secure higher positions, while others have already
got.
4. Later careers when people have settled in respective areas and are planning post-
retirement life.
5. End of career in organisations, rehired, if physically fit and well or lead retired life
dedicated to social and religious life.
Challenges of Career development:
Following are the Challenges of Career development:

1. The promotion challenge: Moving to a higher level in the hierarchy and understanding what
success looks like at the new level, including issues of focus, delegation, credibility and
leadership.
2. The leading-former-peers challenge: Managing a team of former peers with the inevitable
dilemma of establishing authority and altering existing relationships.
3. The diplomacy challenge: Moving from a position of authority to one in which influencing
others and building alliances is critical.
4. The on-boarding challenge: Joining a new organization and needing to quickly understand
and adapt to a new culture, new people and a new political arena.
5. The international move challenge: Leading in an unfamiliar culture while at the same time
moving one’s family and creating a new support system.

Career development initiatives:

The seven strategies include attaining competence in the current job, putting in extended work
hours, developing new skills, developing new opportunities at work, attaining a mentor,
building one’s image and reputation, and engaging in organizational politics.

Attaining competence in the current job is a basic career strategy, given that organizations
make promotion decisions, at least in part, on an employee’s present performance. In addition,
the skills acquired or honed in one job might be essential for performance in another job either
with one’s current employer or with another organization. The concepts underlying the protean
and boundaryless career philosophies make it necessary for individuals to have relevant skills
at the times when those skills are required by employers. Focusing on developing abilities in a
current job can improve an individual’s chances for employability in the future.

Putting in extended hours either at the work site or at home is a popular career strategy,
especially in the early career, when an employee is proving himself or herself to the company.
Working beyond normal hours can enhance performance in one’s current job and can signify
to the organization that one is committed to the job and capable of taking on large volumes of
work. However, putting in extended work hours can also result in negative consequences over
the longer term, given that extra work hours during evenings and weekends might impinge on
the time a person can spend on family or personal activities.

Developing new skills is a career strategy that involves the acquisition or enhancement of work
abilities that either improve performance in the present job or will be required in a subsequent
position. Michael Arthur, Priscilla Claman, and Robert DeFillippi have called this strategy
“knowing how.” They have noted that skill development can involve formal occupational
training as well as experiential learning. Skill development can include activities such as
participation in training seminars, degree or nondegree university programs, or attendance at a
leadership development workshop. Employees can also develop skills by acquiring additional
responsibilities on their current jobs, working with an experienced colleague, or joining
occupational associations that sponsor continuing education.

Developing new opportunities at work includes a number of more specific strategies that are
designed to increase one’s career options. In their typology, Arthur and his colleagues have
referred to this career strategy as “knowing whom.” As an example, self-nomination is a
frequently observed strategy that involves the willingness to inform superiors of
accomplishments, aspirations, and desired assignments. Self-nomination is intended to enhance
one’s visibility and exposure to those in more senior positions within the organization, which
can bring recognition, special assignments, and sponsorship. Another relevant career strategy
under this category is networking, which involves the identification of and communication with
a group of relevant acquaintances and friends who can provide information, advice, and support
regarding career opportunities.

Attaining a mentor as a career strategy has received considerable attention in recent years.
Mentoring can be defined as relationships between junior and senior colleagues or between
peers that provide various developmental functions. The mentoring role can be filled by a
variety of individuals, not by just one person. A mentor can provide coaching, friendship,
sponsorship, and role-modeling to the younger, less experienced protege. In the process, the
mentor can satisfy his or her need to have a lasting influence on another person’s life.

Building one’s image and reputation is a career strategy in which the individual attempts to
convey an appearance of success and suitability. For example, being married, participating in
community activities, and dressing properly can provide a positive public image that can bring
career rewards. While this type of strategy is not necessarily important in all or most situations,
past research has found that significant numbers of employees make the investment in image
building because of the perceived high value to career advancement. Building one’s work
reputation is an important strategy because it is presumed that an individual’s past experiences
and accomplishments bode well for future performance. Thus, a focus on building a strong
work reputation can improve a person’s employability regardless of the employer.

Engaging in organizational politics is somewhat similar to the “knowing why” strategy

described by Arthur and his colleagues and covers such diverse activities as agreeing with or
flattering one’s supervisor, advocating company practices, not complaining about rules or
regulations, and forming alliances or coalitions with others in the organization. More extreme
and often personally unacceptable political practices can include sabotaging another person’s
work or spreading rumours about a colleague. In many organizations, becoming involved in
organizational politics is a career strategy that is necessary for career advancement, although
certain behaviors might be viewed as unethical or reprehensible. Nonetheless, regardless of the
personal acceptability, engaging in organizational politics is a career strategy that is used
regularly.

1.5.3 Talent Management:

There are three interpretations of talent management. Before discussing the explicites it is
desirable to state that the topic talent management came to prominence in the late 19990s when
a group of Mckinsey consultants coined the term The War for Talent.

First interpretation of talent management relates to all activites that help build competitiveness
of an organisation. From this perspective, talent management is understood to refer to the
process of attracting, selecting, training, developing, and promoting employees in an
organisation. This “all things to all people” approach serves no purpose. The second
interpretation runs thus: Talent management is the process of attracting, developing, and
retaining the best people. This interpretation is elitist referring mainly to the creamy layer in
the organisation, ignoring the developmental needs of people in general. Success of an
organisation does not hinge only on high fliers. Success is a shared phenomenon.

Imperatives for Talent Management

Talent management requires data collection on current internal labour supply, tracking
individual performance and progress and providing opportunities for development. More
specifically, talent management requires:

1. Creating a winning employee value proposition that will make the company attractive
to talent.
2. Moving beyond recruiting type to build a long-term recruiting strategy.
3. Using job experience, coaching and mentoring to cultivate the potential in managers.
4. Strengthening the talent pool by investing in A players, developing B players and acting
decisively on C players.
5. Developing a pervasive mindset – a deep conviction shared by all in the organization
that competitive advantage comes from having better talent at all levels.
6. Talent requires individual ability and teamwork. Hiring talented individuals alone
without teamwork may produce personal records but not organizational long-term
success. Talent without teamwork is insufficient.
7. Technology facilitates talent management processes and connections among people.
Technology changes the way talent work is organized and delivered through
information sharing, improving processes, redefinition of work, and social networks.
8. Talent activities and their outcomes need to be measured. Outcomes of talent activities
can be traced to individual capabilities and organizational competencies.
9. Talent will obsolesce faster, posing a challenge and threat to both individuals and
organisations.

Talent Management Strategies:

1. Talent Management Strategy: As part of business strategy, talent management strategy

is a pre-requisite. It involves estimation of the number and type of talent required for
coming period. It involves estimation of the number and type of talent required for a
coming period. This sets the tone for attraction and retention policies and practices.
2. Talent Audit: Talent audit serves three purposes; identify talent potential which can be
earmarked for career planning and development. Such people can be groomed to
assume bigger responsibilities as days go by. Second, talent audit also helps identify
those likely to exit. Steps can then be taken to prevent the exit. Third, talent audit points
out laggards who can either be trained and if it fails may be axed.
3. Learning and Development: Learning and development, also called training and
development is probably the most effective way of talent building. These are several
youngsters, freshers from universities, who have the zeal and the potential but are not
talented due to lack of guidance and facilities. They can be developed through learning.
4. Role Design: Role design should ensure that a role carries enough challenges, autonomy
and responsibilities required to create role engagement and commitment. In addition,
the role holders need to have opportunities and encouragement to learn and develop in
 their respective roles. Talent management policies focus on role flexibility-giving
employees the chance to develop their roles by making better and extended use of their
talents.
5. Talent Relationship Management: This refers to creating a great place to work where
people are encouraged to perform, are recognized and are rewarded. They have a voice
in decision-making and each role carries opportunities for advancement. Talent
management seeks to make people committed to their work and the organization.
Relationship management is the new expression for human relations approach
propounded by Elton Mayo, decades back.
6. Attraction and Retention Policies: Attraction policies refer to external sourcing of
talent. Company image, its growth potential, compensation and advancement
opportunities attract people and tempt them to apply for jobs in the organization.

More difficult is retention of talent. Why employees choose to stay with company is a
question, the answer for which lies in the following factors:
• Exciting, challenging and meaningful work
• Supportive manager, inspiring boss
• Being recognized, valued and respected
• Career growth, learning and development
• Flexible work environment
• Fair pay
• Job location
• Working with inspiring co-workers and clients
• Pride in the organization, mission or product
• Fun, enjoyable work environment
• Attractive benefits

7. Performance Management: Performance management refers to the range of activities

that enable, encourage, co-ordinate and support employees to achieve their objectives.
In addition, it seeks to monitor, measure and reward employees for their performance.
Performance management helps build relationships with people, identify talent, plan
learning and development activities, and build the most of talent possessed by the
organization. When properly carried out, performance management helps build
employee engagement and motivation by providing objective assessment and feedback.
8. Resourcing strategy: This refers to identify talent available within the organization.
Once talent is identified all efforts need to be made to retain it. Talent is a rare quality
which only lucky individual possess, and progressive organizations nurture it. OB
managers should conduct talent risk analysis, identifying probable exists of talent. Such
individuals need to be nurtured, engaged and motivated to stay with the organization.
9. Career Management: This is an important tool for talent management, so important that
career management is treated as another name for talent management.
10. Succession Planning: Succession Planning refers to formulating contingency plans for
the loss of employees holding key positions in the company. Typically characteristics
 of large organizations, succession or replacement planning focuses on providing long-
term development plans for individuals identified as possible successors for senior
managerial positions. This requires the identification of high potential individuals early
in their careers and providing opportunities and encouragement that prepare them for
specific ‘once in a generation’ appointments.
11. Coaching: Coaching provides three benefits to an organization.
• Provides the opportunity for line managers to share wisdom and knowledge,
and to create a culture that values the contribution of each and every employee.
• Managers who coach have the opportunity to inspire, excite and develop
employees.
• Individuals who are coached and who coach have the opportunity to embark on
a voyage of self-discovery and fulfilment.

12. Self-driven: Probably the most effective talent initiative is the individual himself or
herself. It was sheer grit and determination that Eklavya became the archer. It was the
same inspiration that made Columbus and Vascoda Gama discover new continents. It
was the same force ehich made Einstein and his ilk invent new things. It was the same
spirit that prompted Henry Ford say. “Why is it that when I want only a pair of hands,
I get a whole human body”.
13. Others: Certain traditional methods can also be included as part of talent management
initiatives. They include suggestion schemes, quality circles, job enrichment,
empowered teams, ESOPs, and representation on the board. One may disagree from
these inclusions but it is a fact that these techniques are time tested and trusted.

1.5.4 Changing Demographics of Workforce:

The major challenge from challenging demographics of workforce relates to dual career
couples, where both partners are actively pursuing professional careers. Organisational have
been accustomed to using job makes and physical relocation as important means of developing
talent. Men or women, moving up the ranks, need the experience of a variety of roles in
different organisational units. Frequent physical relocation has therefore been required. The
increasing number of dual-career professionals limits individual flexibility in accepting such
assignments and may hinder organisational flexibility in acquiring and developing talent.
The third interpretation is a broader approach and includes efforts to create a ‘pipeline’ or pool
of talented people and ensuring that workforce development is inclusive, accessible and
focused on developing organisational capabilities. Talent management seeks to align people
with roles(treating roles as fixed and developing people to fit these jobs) or aligning roles with
people (Creating and adapting roles to satisfy the aspirations of people). This interpretation is
meaningful.

1.5.5 Changed Employee Expectations:

With the changes in workforce demographics, employee expectations and attitudes have also
changed. Traditional allurements such as job security, attractive remuneration, housing, and
the like do not attract, retain or motivate today’s workforce.
Employees today demand empowerment and expect quality of status with the management.
Previous notions on managerial authority are giving way to employee influence and
involvement along with mechanisms for upward communication.

Empowerment results in redefining jobs, both on the shop floor as well as in boardrooms. As
workmen are given more control over their jobs, a whole class of supervisors may become
redundant, not because they will do a bad job, but because there shall be no need for them.
Empowerment also means that the workers can bring his or her children to the workplace, look
around, and can gain knowledge about our work methods. This privilege enjoyed till now only
by owners of enterprises whose children can access even vital documents. Expectations of
equality are breaking up the traditional relationships between employees and owners. There is
an emphasis on leading by example.

Also, today’s worker demands better treatment, challenging assignments and career
advancement. Look at the workers union of Otis, Hindustan Unilever, ICI, TOMCO, Blue Star,
Webel Electro, and Central Bank. They rewrite their agenda to include quality and better
customer service and are even accusing the managements of malpractice. Or take a look at the
4.70,000 human resources of telecom commission. Unions are demanding not so much for pay
rise as for intensive training programmes to upgrade their skills to meet changing technologies.
Job security, monetary benefits, uniform, housing, canteen, buses, and other facilities alone
may not, therefore, motivate the employees. The managers of people must redraw the profile
of workers and discover new methods of hiring, training, retaining, remunerating and
motivating them.

1.5.6 Globalization:
Growing internationalisation of business has its impact on people management. The
management is required to cope up with problems of unfamiliar laws, languages, practices,
competitors, attitudes, management styles, work ethics, and more. Personnel functions such as
hiring, training, compensating, maintaining, and the like must acquire a global perspective. To
face this challenge, the management must be flexible and proactive. By being able flexible and
proactive, management can make significant contribution to the company’s growth. By helping
the best-qualified people execute the company’s strategy on a global scale, management can
become a source of competitive advantage for the company.

Specifically, internationalisation of business presents at least four challenges:

1. Globalization affects an increasing number of managers and professionals,
2. Internationalization puts a premium on certain competencies (or skills),
3. Managerial learning is a critical process in internationalization, bringing team work
strongly to the fore, and
4. Management of careers in the context of globalization brings about peculiar difficulties
in many companies.
1.5.7 Technology Transformation:
Technological transformation is the complete overhaul of an
organization's technology systems encompassing network architecture, hardware, software and
how data is stored and accessed and affecting all of people, process and technology. In today’s
context every organization has undergone transformation one step ahead embracing digital
technology transformation in their processes and methods. All the sectors have seen the drastic
change in terms technological upgradation. Organizations across the globe has gone for an
overhaul technologically in order leverage on the changes happening all the world in business
environment. Satisfying the needs and presenting the customers an array of products has
become mandatory practice worldwide and no organization is leaving things behind in terms.

1.5.8 Promoting Ethical Behaviour:

Every decision and behaviour in organisation will have underlying foundation of ethics,
principles, and rules. It is important on the part of managers to ensure that ethical concepts are
understood, principles are respected, and rules are observed.

Ethics refers to a system of morale principles- a sense of right and wrong, the goodness and
badness of actions, and the motives and consequences of these actions. As applied to
organisations ethics is the study of good and evil, right and wrong, and just and unjust actions
of managers.
1.5.9 Corporate Social Responsibility:
Corporate social responsibility (CSR) is also known by a number of other names. These include
corporate responsibility, corporate accountability, corporate ethics, corporate citizenship or
stewardship, responsible entrepreneurship, and “triple bottom line,” to name just a few. As
CSR issues become increasingly integrated into modern business practices, there is a trend
towards referring to it as “responsible competitiveness” or “corporate sustainability.” A key
point to note is that CSR is an evolving concept that currently does not have a universally
accepted definition. Generally, CSR is understood to be the way firms integrate social,
environmental and economic concerns into their values, culture, decision making, strategy and
operations in a transparent and accountable manner and thereby establish better practices
within the firm, create wealth and improve society. As issues of sustainable development
become more important, the question of how the business sector addresses them is also
becoming an element of CSR.

The World Business Council for Sustainable Development has described CSR as the business
contribution to sustainable economic development. Building on a base of compliance with
legislation and regulations, CSR typically includes “beyond law” commitments and activities
pertaining to:
• corporate governance and ethics;
• health and safety;
• environmental stewardship;
• human rights (including core labour rights);
• sustainable development;
• conditions of work (including safety and health, hours of work, wages);
• industrial relations;
• community involvement, development and investment;
• involvement of and respect for diverse cultures and disadvantaged peoples;
• corporate philanthropy and employee volunteering;
• customer satisfaction and adherence to principles of fair competition;
• anti-bribery and anti-corruption measures;
• accountability, transparency and performance reporting;
• supplier relations, for both domestic and international supply chains.

Social responsibility, popularly called corporate social responsibility (CSR), refers to the social
actions taken by corporates to improve welfare of society along with promotion of their own
interests. What was understood and implemented was that CSR was voluntary but now it is
mandated.

Factors leading to increased role of CSR in companies are:

• Sustainable development: United Nations’ (UN) studies and many others have underlined the
fact that humankind is using natural resources at a faster rate than they are being replaced. If
this continues, future generations will not have the resources they need for their development.
In this sense, much of current development is unsustainable—it can’t be continued for both
practical and moral reasons. Related issues include the need for greater attention to poverty
alleviation and respect for human rights. CSR is an entry point for understanding sustainable
development issues and responding to them in a firm’s business strategy.

• Globalization: With its attendant focus on cross-border trade, multinational enterprises and
global supply chains—economic globalization is increasingly raising CSR concerns related to
human resource management practices, environmental protection, and health and safety,
among other things. CSR can play a vital role in detecting how business impacts labour
conditions, local communities and economies, and what steps can be taken to ensure business
helps to maintain and build the public good. This can be especially important for export-
oriented firms in emerging economies.

• Governance: Governments and intergovernmental bodies, such as the UN, the Organisation
for Economic Co-operation and Development (OECD) and the International Labour
Organization (ILO) have developed various compacts, declarations, guidelines, principles and
other instruments that outline norms for what they consider to be acceptable business conduct.
CSR instruments often reflect internationally-agreed goals and laws regarding human rights,
the environment and anti-corruption.
• Corporate sector impact: The sheer size and number of corporations, and their potential to
impact political, social and environmental systems relative to governments and civil society,
raise questions about influence and accountability. Even small and medium size enterprises
(SMEs), which collectively represent the largest single employer, have a significant impact.
Companies are global ambassadors of change and values. How they behave is becoming a
matter of increasing interest and importance (see box below).

• Communications: Advances in communications technology, such as the Internet and mobile

phones, are making it easier to track and discuss corporate activities. Internally, this can
facilitate management, reporting and change. Externally, NGOs, the media and others can
quickly assess and profile business practices they view as either problematic or exemplary. In
the CSR context, modern communications technology offers opportunities to improve dialogue
and partnerships.

• Finance: Consumers and investors are showing increasing interest in supporting responsible
business practices and are demanding more information on how companies are addressing risks
and opportunities related to social and environmental issues. A sound CSR approach can help
build share value, lower the cost of capital, and ensure better responsiveness to markets.

• Ethics: A number of serious and high-profile breaches of corporate ethics resulting in damage
to employees, shareholders, communities. A CSR approach can help improve corporate
governance, transparency, accountability and ethical standards

• Consistency and Community: Citizens in many countries are making it clear that corporations
should meet the same high standards of social and environmental care, no matter where they
operate. In the CSR context, firms can help build a sense of community and shared approach
to common problems.

• Leadership: At the same time, there is increasing awareness of the limits of government
legislative and regulatory initiatives to effectively capture all the issues that CSR address. CSR
can offer the flexibility and incentive for firms to act in advance of regulations, or in areas
where regulations seem unlikely.

• Business Tool: Businesses are recognizing that adopting an effective approach to CSR can
reduce the risk of business disruptions, open up new opportunities, drive innovation, enhance
brand and company reputation and even improve efficiency.

1.5.10 Organizational Justice:

Justice refers to a sense of fairness. Organisational justice refers to the perceptions held by
employees about the fairness of rewards they are receiving. A few questions relevant here
are: Is one’s performance assessment accurate and objective? Is the compensation one
receives matches with his or her inputs to the company? Are you recognised for your
performance?

Four forms of organisational justice are relevant : distributive, informational, procedural, and
interpersonal.

Distributive Justice : This refers to the extent of satisfaction employees derive from their
outcomes from the organisation. Outcomes include compensation, work assignments, foreign
jaunts and the like.

Informational Justice: This refers to people’s perceptions of the fairness of the information
used as the basis for decision making. How does, for example, an employee feel when
uninformed, his or her pay has been cut Rs. 1,000/- the amount to be donated for some relief?
Decisions made based on sound information are fair and are accepted by employees without
resistance.

Procedural Justice : This refers to employee’s perceptions of the fairness of the procedures
used to determine the outcomes they receive. Relevant questions in this context include:
What methods and procedures were used to assess your performance? How has been
overtime work allotted?

Interpersonal Justice: This refers to the fairness of the manner with which supervisors treat
their subordinates. Assume an employee has been laid off. Grieved person will derive solace
if the supervisor gives patient listening and offers sound advice. Though lay-off is a decision
that is made by the top management, kind words from the supervisor will smoothen ruffled
feelings of the affected employee.

How to increase organizational justice

Organizational justice is not given, but a result of a set of management interventions and
behaviours. As a professional, it is important that you know how your behaviour and decision-
making activities influence organizational justice. We have a look at a set of practical ways
how you can foster organizational justice in your organization.

Effective communication
When employers use effective communication, this can result in perceptions of interpersonal
and informational justice. It is important that organizations use quality communication when
explaining decisions to employees because this can increase trust, for both management and
the organization. An example of this is when organizations need to make several jobs positions
redundant. It is important to explain to all employees why the redundancies are occurring and
to also treat those laid off with dignity and fair treatment.

Employee participation
Another predictor of organizational justice is employee participation. When organizations
include employees in decision-making processes regarding organizational procedures this
increases perceptions of justice.

Employee mood and emotions

When organizational events occur, this can have an impact on employee mood and emotions.
Moreover, employees interpret events differently and this can depend on employee disposition;
for example, when a crisis occurs some employees might be more anxious than others.

1.6 Summary

• Organizational behaviour (often abbreviated as OB) is a field of study that

investigates how individuals, groups, and structure affect and are affected by
behaviour within organizations. Behaviour refers to what people do in the
organization, how they per- form, and what their attitudes are.

• “OB is a field of study that investigates the impact that individuals, groups and structure
have on behaviour within organisations for the purpose of applying such knowledge
towards improving an organisation’s effectiveness.”
• A manager is someone whose primary responsibility is to carry out the management
process. In particular. a manager is someone who plans and makes decisions, organizes,
leads, and controls human, financial, physical, and information resources.
• Organizational diversity in the workplace refers to the total makeup of the employee
workforce and the amount of diversity included. Diversity refers to differences in
various defining personal traits such as age, gender, race, marital status, ethnic origin,
religion, education and many other secondary qualities.

• Career management refers to the activities companies carry out to sustain their
employees' career development, helping them obtain promotions and pay raises, and
assisting their transition into leadership positions.
• Talent management is a constant process that involves attracting and retaining high-
quality employees, developing their skills, and continuously motivating them to
improve their performance.

• Technological transformation is the complete overhaul of an

organization's technology systems encompassing network architecture, hardware,
software and how data is stored and accessed and affecting all of people, process
and technology.

• Organizational justice generally refers to perceptions of fairness in treatment of

individuals internal to that organization while corporate social responsibility focuses
on the fairness of treatment of entities external to the organization.
Questions

Section A
1. What do you mean by Organisational Behaviour?
2. Define Organisational Behaviour.
3. Who is a manager?
4. Define top level manger and give few examples.
5. What is organisational diversity?
6. What is ethnocentrism?
7. Define career management.
8. Define talent management.
9. What do you mean by globalisation?
10. What is organisational justice?

Section B
1. Explain the characteristics or features of Organisational Behaviour.
2. Explain about the different types of Manager’s role.
3. List out and briefly explain the barriers to accept diversity.
4. What do you mean by career management and explain the process in career
management ?
5. Define CSR and explain the benefits of CSR in Organisational Behaviour.

Section C
1. Define Organisational Behaviour and explain in detail why organisations exist with
examples.
2. Explain the challenges Organization and corporations are facing to stay competitive
and creating growth and sustainability .

Answers
Section A
1. 1.2
2. 1.2.1
3. 1.4
4. 1.4.2
5. 1.5.1
6. 1.5.1
7. 1.5.2
8. 1.5.3
9. 1.5.6
10. 1.5.10

Section B
 1. 1.2.2
2. 1.4.1
3. 1.5.1
4. 1.5.2
5. 1.5.9

Section C
1. 1.3
2. 1.5.1
 Module 2

The Nature & Importance of Leadership

Learning Outcome: Appraise leadership skills through participation in experiential exercises

(CO2)

Structure
2.1 Meaning of Leadership
2.2 Leadership as a Partnership
2.3 Leadership as a Relationship
2.4 Leadership versus Management
2.5 The Impact of Leadership on Organizational Performance
2.5.1 Leadership does make a difference
2.5.2 Leadership does not make a difference
a) Substitutes for Leadership
b) Leader Irrelevance
2.6 Leadership Roles - Figurehead, Spokesperson, Negotiator, Coach and Motivator, Team
Builder, Team Player, Technical Problem Solver, Entrepreneur, Strategic Planner
2.7 The Satisfactions and Frustrations of being a Leader
2.8 Meaning of Followership
2.9 Types of Followers
2.10 Essential Qualities of Effective Followers

Learning Objectives

Explain the meaning of leadership, and how it differs from management.

Describe how leadership influences organizational performance.
Pinpoint several important leadership roles.
Identify the major satisfactions and frustrations associated with the leadership role.
Describe a framework for understanding leadership.
Introduction

Leadership is the ability to inspire confidence in and support among the people who are
needed to achieve organizational goals. Leading is a major part of a manager’s job, but a
manager also plans, organizes, and controls. Leadership is said to deal with change,
inspiration, motivation, and influence. In contrast, management deals more with maintaining
equilibrium and the status quo. Leadership is often regarded as a partnership or collaboration
between leaders and group members. Many people attribute organizational performance to
leadership actions.

2.1 Meaning of Leadership

Leadership as the ability to inspire confidence and support among the people who are
needed to achieve organizational goals.
Here are several other representative definitions of leadership
A process in which an individual influences a group of individuals to achieve a
common goal.
The influential increment over and above mechanical compliance with directions and
orders.
An act that causes others to act or respond in a shared direction.
The art of influencing people by persuasion or example to follow a line of action.
According to Keith Davis, “Leadership is the ability to persuade others to seek
defined objectives enthusiastically. It is the human factor which binds a group
together and motivates it towards goals.”

2.2 Leadership as a Partnership

The current understanding of leadership is that it is a long-term relationship, or partnership,

between leaders and group members. According to Peter Block, in a partnership the leader
and the group members are connected in such a way that the power between them is
approximately balanced. Block also described partnership as the opposite of parenting.
Partnership occurs when control shifts from the leader to the group members, in a move away
from authoritarianism and toward shared decision making,
Four things are necessary for a valid partnership to exist.
 1. Exchange of purpose: In a partnership, every worker at every level is responsible for
defining vision and values. Through dialogue with people at many levels, the leader
helps articulate a widely accepted vision.
2. A right to say no: the belief that people who express a contrary opinion will be
punished runs contrary to a partnership. Rather, a person can lose an argument but
never a voice.
3. Joint accountability: In a partnership, each person is responsible for outcomes and
the current situation. In practice, this means that each person takes personal
accountability for the success and failure of the organisational unit.
4. Absolute honesty: in a partnership, not telling the truth to one another is an act of
betrayal. When power is distributed, people are more likely to tell the truth because
they feel less vulnerable.
Block’s conception of leadership as a partnership is an ideal to strive toward. Empowerment
and team building—two major topics in this book—support the idea of a partnership.
Looking at leadership as a partnership is also important because it is linked to an optimistic
view' of group members, referred to as stewardship theory. This theory depicts group
members (or followers) as being collectivists, pro-organizational, and trustworthy. 9 A
collectivist is a person who is more concerned about the welfare of the group than about his
or her personal welfare. Have you met many collectivists in the workplace?

2.3 Leadership as a relationship

A modern study of leadership emphasizes that it consists of a relationship between the leader
and the people being led. A leadership is not a trait or behaviour of an individual, but a
phenomenon generated in the interactions among people acting in a given setting. The social
actions between and among people enable them to work together in meaningful ways to
produce leadership outcomes. For example, a leader at a vehicle dealership might be pursuing
the outcome of generating more revenue per vehicle purchase. By building good relationships
with dealer associates, he or she gains their cooperation in generating useful ideas for
generating more revenue, such as pushing harder to get customers to purchase a navigation
and security system that generates monthly revenue.

How leaders build relationships has changed somewhat in the modern era and its emphasis on
interacting with people electronically. It is common practice for leaders to give recognition
and praise via e-mail or a posting on the company social media site, or a public social media
site such as Facebook or Twitter. The late Steve Jobs, the Apple Company cofounder,
however, emphasized that leaders should not let communication technology block them from
interacting face-to-face with work associates. “There’s a temptation in our networked age to
think that ideas can be developed by e-mail and iChat. That’s crazy. Creativity comes from
spontaneous meetings, from random discussions.”13 In addition to sparking innovation, the
face-to-face encounters help develop
relationships.

2.4 Leadership vs Management

leadership deals with the interpersonal aspects of a manager’s job, whereas planning,
organizing, and controlling deal with the administrative aspects. Leadership deals with
change, inspiration, motivation, and influence. According to John P. Kotter, a prominent
leadership theorist, managers must know how to lead as well as manage. Without being led as
well as managed, organizations face the threat of extinction.

2.4.1 Distinctions between management and leadership

Management produces order, consistency, and predictability.

Leadership produces change and adaptability to new products, new markets, new
competitors, new customers, and new work processes.
Leadership, in contrast to management, involves having a vision of what the
organization can become and mobilizing people to accomplish it.
Leadership produces change, often to a dramatic degree, such as by spearheading the
launch of a new product or opening a new market for an old product.
Management is more likely to produce a degree of predictability and order.
Top-level leaders are likely to transform their organizations, whereas top-level
managers just manage (or maintain) organizations.
A leader creates a vision (lofty goal) to direct the organization. In contrast, the key
function of the manager is to implement the vision.
The manager and his or her team thus choose the means to achieve the end that the
leader formulates.
2.4.2 Leaders vs Managers

Basis Manager Leader

A person becomes a leader

A person becomes a manager by
Origin on basis of his personal
virtue of his position.
qualities.

Manager has got formal rights in

Rights are not available to a
Formal Rights an organization because of his
leader.
status.

The group of employees

The subordinates are the
Followers whom the leaders leads are
followers of managers.
his followers.

Leader influences people to

A manager performs all five
Functions work willingly for group
functions of management.
objectives.

A leader is required to create

A manager is very essential to a cordial relation between
Necessity
concern. person working in and for
organization.

Stability It is more stable. Leadership is temporary.

Mutual
All managers are leaders. All leaders are not managers.
Relationship

Manager is accountable for self

Leaders have no well-
Accountability and subordinates behaviour and
defined accountability.
performance.

A manager’s concern is A leader’s concern is group

Concern
organizational goals. goals and member’s
 satisfaction.

People follow manager by virtue People follow them on

Followers
of job description. voluntary basis.

A manager can continue in office

A leader can maintain his
Role till he performs his duties
position only through day to
continuation satisfactorily in congruence with
day wishes of followers.
organizational goals.

A leader has command over

Manager has command over different sanctions and
Sanctions allocation and distribution of related task records. These
sanctions. sanctions are essentially of
informal nature.

2.5 The Impact of Leadership on Organisational Performance

The role of leadership in an organization is crucial in terms of creating a vision, mission,
determination and establishment of objectives, designing strategies, policies, and methods
to achieve the organizational objectives effectively and efficiently along with directing
and coordinating the efforts and organizational activities. Top quality leadership is
essential to achieve the mission and vision along with coping with the changes occurring
in the external environment.
In current time, many companies are facing problems related to unethical practices, high
labor turnover, poor financial performance, etc. This may be due to the lack of effective
leadership. The main aim of many companies is to accomplish its stated objectives;
hence, there is a need of effective leaders for coordinating and motivating the employees.
Unfortunately, some companies do not take account of the leadership style adopted by
their managers.
2.5.1 Organisational performance

Organizational Performance is a complex and multidimensional phenomenon in the

business literature. Organizational performance comprises of the results of an
 organization or the actual outputs of an organization, which can be measured against
intended outputs, goals and objectives. The organizational performance involves three
areas associated with the organization – financial performance (return on investments,
profits etc.), shareholder return (economic value added, total shareholder etc.) and the
product/service market performance (market share, sales etc.)

2.5.1 Leadership Does Make a Difference

The idea that leaders actually influence organizational performance and morale is widely
believed, and there has been a moderate amount of research and opinion that deals with this
issue.
The flexible leadership theory developed by Gary Yukl, a professor of management at the
University of Albany, also provides insight as to when leaders contribute to organizational
performance. One proposition of the theory is that organizational performance is stronger
when the influence of middle- and lower-level leaders on important decisions is
commensurate with their unique, relevant knowledge. The implication is that involving
leaders throughout the organization in making decisions improves company performance—if
these leaders are knowledgeable about the problem to be resolved.
An overview of research on managerial succession over a recent twentyyear period provides
more support for the idea that leadership has an impact on organizational performance. A
consistent relationship was found between who is in charge and how well an organization
performed as measured by a variety of indicators. Using different methodologies, these
studies arrived at the same conclusion that changes in leadership are followed by changes in
company performance.

Leadership researcher Bruce J. Avolio from the University of Washington, along with four
colleagues, conducted a comprehensive synthesis of 200 studies about the impact of
leadership. The studies analyzed included those conducted in laboratories and in work
settings. The many outcomes of leadership studied included the satisfactions of subordinates
and organizational performance. One of the many study findings was that the leader’s
activities had a 66 percent probability of achieving a positive outcome

2.5.2 Formal Leadership Does not make a Difference

In contrast to the previous argument, the anti-leadership argument holds that the impact of the
leader on organizational outcomes is smaller than the impact of forces within the situation.
The two major arguments against the importance of leadership are substitutes for leadership
and leadership irrelevance.

a) Substitutes for Leadership

At times, competent leadership is not necessary, and incompetent leadership can be
counterbalanced by certain factors in the work situation. Under these circumstances,
leadership itself is of little consequence to the performance and satisfaction of team members
Closely knit teams of highly trained individuals: When members of a cohesive,
highly trained group are focused on a goal, they may require almost no leadership to
accomplish their task.
Intrinsic satisfaction: Employees who are engaged in work they find strongly self-
motivating, or intrinsically satisfying, require a minimum of leadership. Part of the
reason is that the task itself grabs the worker’s attention and energy. The worker may
require little leadership as long as the task is proceeding smoothly.
Information technology: Some companies today use computer-aided monitoring
and computer networking to take over many of the supervisor’s leadership functions.
The computer provides productivity and quality data, and directions for certain tasks
are entered into the information system. (We could argue here that the computer is
being used to control, rather than to lead, workers.) From a positive perspective, the
information technology can provide workers at all levels with useful performance
feedback enabling them to guide their own productivity.
Professional norms: Workers who incorporate strong professional norms often
require a minimum of supervision and leadership. A group of certified professional
accountants may not need visionary leadership to inspire them to do an honest job of
auditing the books of a client or advising against tax fraud.

b) Leadership Irrelevance
Leadership irrelevance argument is that high-level leaders have unilateral control over only a
few resources. Furthermore, the leader’s control of these resources is limited by obligations
to stakeholders like consumers and stockholders. Finally, firms tend to choose new
organizational leaders whose values are compatible with those of the firm. The leaders
therefore act in ways similar to previous leaders
The argument for leadership irrelevance is that in the modern organization effective
leadership means widespread collaboration in obtaining ideas, rather than the heroic leader
doing all the innovating. According to this point of view, instead of centralizing leadership in
the hands of a few, authority and power are shared, and people lead themselves.
The leader irrelevance argument would have greater practical value if it were recast as a
leader constraint theory, which would hold that leaders are constrained in what they can do
but still have plenty of room to influence others.

2.6 Leadership roles

As we know leadership is the art of motivating a group of people to act toward achieving a
common goal. In a business setting, this can mean directing workers and colleagues with a
strategy to meet the company's needs. There are different levels of managers in any
organisation every manager is a leader and roles of leadership is applicable to all the
managers in any organisation. Some of the leadership roles carried by managers are as
follows.

1. Figurehead
The manager represents the organization in all matters of formality. The top-level
manager represents the company legally and socially to those outside of the
organization. The supervisor represents the work group to higher management and
higher management to the work group.

2. Spokesperson
When a leader acts as a spokesperson, the emphasis is on answering inquiries and
formally reporting to individuals and groups outside the manager’s organizational unit.
As a spokesperson, the manager keeps five groups of people informed about the unit’s
activities, plans, and capabilities. These groups are
(a) upper-level management,
(b) clients and customers,
(c) other important outsiders (such as labor unions),
(d) professional colleagues, and
(e) the general public. Usually, top-level managers take responsibility for keeping
outside groups informed.
3. Negotiator
The manager negotiates on behalf of the organization. The top-level manager makes
the decisions about the organization as a whole, while the supervisor makes decisions
about his or her particular work unit.

4. Motivator and Coach.

An effective manager takes time to motivate and coach group members. Specific
behaviours in this role include
(a) informally recognizing employee achievements;
(b) offering encouragement and reassurance, thereby showing active concern about the
professional growth of group members;
(c) providing feedback about both effective and ineffective performance; and
(d) giving group members advice on steps to improve their performance.

5. Team Builder
A key aspect of a manager’s role is to build an effective team. Activities contributing
to this role include
(a) ensuring that group members are recognized for their accomplishments (by issuing
letters of appreciation, for example);
(b) initiating activities that contribute to group morale, such as giving parties and
sponsoring sports teams; and
(c) holding periodic staff meetings to encourage group members to talk about their
accomplishments, problems, and concerns.

6. Team Player
Three behaviours of the team player are
(a) displaying appropriate personal conduct,
(b) cooperating with other units in the organization, and
(c) displaying loyalty to superiors by fully supporting their plans and decisions after
evaluation.

7. Technical Problem Solver

 It is particularly important for first- and middle-level managers to help group members
solve technical problems. Two such specific activities related to problem solving are
(a) serving as a technical expert or advisor and
(b) performing individual contributor tasks, such as making sales calls or fixing
software problems on a regular basis. The managers most in demand today are those
who combine leadership skill with a technical or business specialty.

8. Entrepreneur
Managers who work in large organizations have some responsibility for suggesting
innovative ideas or furthering the business aspects of the firm. Three entrepreneurial
role activities are
(a) reading trade publications and professional journals and searching the Internet to
keep up-to-date;
(b) talking with customers or others in the organization to keep abreast of changing
needs and requirements; and
(c) getting involved in activities outside the unit that could result in performance
improvements within the manager’s unit. These activities might include visiting other
firms, attending professional meetings or trade shows, and participating in educational
programs.

9. Strategic Planner
Top-level managers engage in strategic planning, usually assisted by input from others
throughout the organization. Specific activities in this role include

(a) setting a direction for the organization,

(b) helping the firm deal with the external environment, and

(c) developing corporate policies

2.7 The satisfactions and frustrations of being a leader

The term "LEADER" has a positive connotation for most people. To be called a
LEADER is generally better than to be called a follower or a subordinate.

Yet being a LEADER, such as a TL,VP or COO, does not always bring personal
satisfaction. Some leadership jobs are more fun than others, such as being the leader of
successful group with cheerful team members.

As most of us are contemplating becoming a leader or moving further into a leadership

role, it is worthwhile to examine some of the potential satisfactions and frustrations
many people find in being an organizational leader.

a) Satisfactions of Leaders:

There are seven sources of satisfaction that leaders often experience.

1. A feeling of power and prestige: Being a leader automatically grants you

some power. Prestige is forthcoming because many people think highly of
people who are leaders. In some organizations, top-level leaders are addressed
as Mr., Mrs., or Ms., whereas lower-ranking people are referred to by their
surnames. Yet most leaders encourage others to address them by their first
names.
2. A chance to help others grow and develop: A leader works directly with
people, often teaching them job skills, serving as a mentor, and listening to
personal problems. Part of a leader’s job is to help other people become
managers and leaders. A leader often feels as much of a people helper as does
a human resource manager or a counselor. Kip Tindell, founder of the
Container Store, says that one of the most rewarding aspects of his job is
enriching people’s lives.
3. High income: Leaders, in general, receive higher pay than team members,
and executive leaders in major business corporations typically earn several
million dollars per year. A handful of business executives receive
compensation of over $100 million per year and several have received over
$150 million as compensation for being fired. If money is an important
motivator or satisfier, being a leader has a built-in satisfaction.
 4. Respect and status: A leader frequently receives respect from group
members. He or she also enjoys a higher status than people who are not
occupying a leadership role. Status accompanies being appointed to a
leadership position on or off the job. When an individual’s personal
qualifications match the position, his or her status is even higher.
5. Good opportunities for advancement: Once you become a leader, your
advancement opportunities increase. Obtaining a leadership position is a vital
first step for career advancement in many organizations. Staff or individual
contributor positions help broaden a person’s professional experience, but most
executives rise through a managerial path.
6. A feeling of being in on things: A side benefit of being a leader is that you
receive more inside information. For instance, as a manager you are invited to
attend management meetings. In those meetings, you are given information not
passed along to individual contributors. One such tidbit might be plans for
expansion or downsizing.
7. An opportunity to control money and other resources: A leader is often
in the position of helping to prepare a department budget and authorize
expenses. Even though you cannot spend this money personally, knowing that
your judgment on financial matters is trusted does provide some satisfaction.
Many leaders in both private and public organizations control annual budgets
of several million dollars.

b) Frustrations of Leaders:

Many individual contributors refuse to accept a leadership role because of the

frustrations they have seen leaders endure. These frustrations include the following:

1. Too much uncompensated overtime: People in leadership jobs are usually

expected to work longer hours than other employees. Such unpaid hours are called
casual overtime. People in organizational leadership positions typically spend
about fifty-five hours per week working. During peak periods of peak demands,
this figure can surge to eighty hours per week.
2. Too many headaches: It would take several pages to list all the potential
problems leaders face. Being a leader is a good way to discover the validity of
Murphy’s law: “If anything can go wrong, it will.” A leader is subject to a batch
 of problems involving people and things. Many people find that a leadership
position is a source of stress, and many managers experience burnout.
3. Facing a perform-or-perish mentality: Many leaders face an enormous amount
of pressure to either perform or be fired. These pressures often can be found in
companies owned by private equity (or buyout) firms. The head of each company
owned by an equity firm is expected to make the company profitable through such
means as slashing costs, boosting sales in international markets, and paying down
debt. There is also considerable pressure on the CEO to improve operations by
making them more efficient.
4. Not enough authority to carry out responsibility: People in managerial
positions complain repeatedly that they are held responsible for things over which
they have little control. As a leader, you might be expected to work with an ill-
performing team member, yet you lack the power to fire him or her. Or you might
be expected to produce high-quality service with too small a staff and no authority
to become fully staffed.
5. Loneliness: The higher you rise as a leader, the lonelier you will be in a certain
sense. Leadership limits the number of people in whom you can confide. It is
awkward to confide negative feelings about your employer to a team member. It is
equally awkward to complain about one group member to another. Some people
in leadership positions feel lonely because they miss being one of the gang.
6. Too many problems involving people: A major frustration facing a leader is the
number of human resource problems requiring action. The lower your leadership
position, the more such problems you face. For example, the office supervisor
spends more time dealing with problem employees than does the chief
information officer. If you do not like dealing with people problems, you are not
suited for a leadership or management position.
7. Too much organizational politics: People at all levels of an organization, from
the office assistant to the chairperson of the board, must be aware of political
factors. Yet you can avoid politics more easily as an individual contributor than
you can as a leader. As a leader you have to engage in political byplay from three
directions: below, sideways, and upward. Political tactics such as forming
alliances and coalitions are a necessary part of a leader’s role. Another
troublesome aspect of organizational politics is that there are people lurking who
want to take you out of the game, particularly if you are changing the status quo.
2.8 Followership
To be an effective leader, one needs good followers. Leaders cannot exist without followers.
As we mentioned at the outset of this book, the word followers suffers from political
incorrectness, yet it is a neutral term as used by leadership researchers. A point of view that
represents a modern view of leadership, as explained by J. Richard Hackman and Ruth
Wageman, is that leaders are also followers and followers also exhibit leadership. Each
subordinate will often carry out a leadership role, such as heading up a short-term project—or
even organizing this year’s holiday party. Another perspective on followers is that they are
the people who get things done; that the bright ideas of leaders would go nowhere without the
doers.

2.9 Types of Followers

A major challenge in being a leader is to recognize that followers differ substantially in talent
and motivation. Similarly, a challenge in becoming an effective follower is to understand
your basic approach to being a group member.
1. Isolates are completely detached and passively support the status quo by not taking
action to bring about changes. They do not care much about their leaders and just do
their job without taking an interest in the overall organization. Isolates need coaching,
yet sometimes firing them is the only solution.
2. Bystanders are free riders who are typically detached when it fits their self-interests.
At a meeting, a bystander is more likely to focus on the refreshments and taking peeks
at his or her personal text messages. Bystanders have low internal motivation, so the
leader has to work hard to find the right motivators to spark the bystander into action.
3. Participants show enough engagement to invest some of their own time and money
to make a difference, such as taking the initiative to learn new technology that would
help the group. Participants are sometimes for, and sometimes against, the leader and
the company. The leader has to review their work and attitudes carefully to determine
whether or not the participant is being constructive.
4. Activists are considerably engaged, heavily invested in people and processes, and
eager to demonstrate their support or opposition. They feel strongly, either positively
or negatively, about their leader and the organization and act accordingly. An activist
might be enthusiastic about reaching company goals, or so convinced that the
 company is doing the wrong thing that he or she blows the whistle (reports the
company to an outside agency). The leader has to stay aware of whether the activist is
for or against the company.
5. Diehards are super-engaged to the point that they are willing to go down for their
own cause, or willing to oust the leader if they feel he or she is headed in the wrong
direction. Diehards can be an asset or a liability to the leader. Diehards have an even
stronger tendency to be whistle blowers than do activists. A diehard, for example,
might take it on her own to test the lead quantity of paint in children’s furniture sold
by the company. Leaders have to stay in touch with diehards to see if their energy is
being pointed in the service of the organization.

2.10 Essential Qualities of Effective Followers

1. Self-management: The key to being a good follower is to think for oneself and to
work well without close supervision. Effective group members see themselves as
being as capable as their leaders.
2. Commitment: Effective followers are committed to something beyond themselves,
be it a cause, product, department, organization, idea, or value. To a committed group
member, the leader facilitates progress toward achieving a goal.
3. Competence and focus: Effective followers build their competence and focus their
efforts for maximum impact. Competence centres on mastering skills that will be
useful to the organization. Less effective group members rarely take the initiative to
engage in training and development.
4. Courage: Effective followers establish themselves as independent, critical thinkers
and fight for what they believe is right. A good follower, for example, might
challenge the company’s policy of taking ninety days to make good on accounts
payable, or of recruiting key people almost exclusively from people with demographic
characteristics similar to those of top management
Summary

Leadership is the ability to inspire confidence in and support among the people who are
needed to achieve organizational goals. Leading is a major part of a manager’s job, but a
manager also plans, organizes, and controls. Leadership is said to deal with change,
inspiration, motivation, and influence. In contrast, management deals more with maintaining
equilibrium and the status quo. Leadership is often regarded as a partnership or collaboration
between leaders and group members.

Leadership skills can be developed by following a general learning model that involves
acquiring conceptual knowledge, reading examples, doing experiential exercises, obtaining
feedback, and practicing in natural settings.

A major challenge facing leaders is that followers differ substantially in characteristics,

including level of engagement from feeling and doing nothing to total passion, commitment,
and involvement. To be an effective leader, one needs good followers with characteristics
such as self-management, commitment, competence and focus, and courage. A key role for
followers is to collaborate with leaders in achieving organizational goals. The post
bureaucratic organization requires a new kind of alliance between leaders and the led.
 Module 3

TRAITS, MOTIVES AND CHARACTERISTICS OF LEADERS

Structure

3.1 Introduction

3.2 Personality Traits of Effective Leaders

3.2.1 Five qualities of effective leaders

3.3 General Personality Traits

3.3.1 Self-confidence, Humility, Trustworthiness, Assertiveness, Emotional Stability,

Enthusiasm, Sense of Humour, Warmth

3.4 Task related Personality Traits

3.4.1 Passion for the work & people, Emotional Intelligence, Flexibility & Adaptability,
Internal Locus of control, Courage

3.5 Leadership Motives

3.5.1 Power Motive, Drive & Achievement Motive, Strong Ethic Motive, Tenacity,
Resilience

3.6 Cognitive factors & Leadership

3.6.1 Cognitive Intelligence, Knowledge of the group or task, Creativity, Insight,

Farsightedness and Conceptual Thinking.

3.7 Strengths and Limitations of the Trait Approach

For Private Circulation only

3.1 Introduction

A personality trait is personality characteristic that endures over time and across different
situation. Personality traits reflect people's characteristic patterns of thoughts, feelings, and
behaviour. Personality traits imply consistency and stability—someone who scores high on a
specific trait like Extraversion is expected to be sociable in different situations and over time.

3.2 Personality Traits of Effective Leaders

Successful leaders demonstrate the following five leadership qualities in their personal
and professional lives, inspiring others to take action and set a course for future success. Strong
leaders also practice key behaviors on a regular basis in order to strengthen the positive impact of
these qualities.

3.2.1 Five qualities of effective leaders

They are self-aware and prioritize personal development.

Effective leaders focus on developing their emotional intelligence, Goode says. Leaders
who work to refine this quality are more adaptive, resilient, and accepting of feedback from
others. They are also effective listeners and open to change.

They focus on developing others.

This leadership quality builds on the principles of the situational leadership theory, which
suggests that effective leaders adapt to whether an individual or group is ready, willing, and able
to take specific action. Delegating, coaching, and mentoring are important tasks for situational
leadership, Goode says.

They encourage strategic thinking, innovation, and action.

“As a leader, you have to look forward. You have to think about where the organization
is going,” Goode says.

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 Leaders must consider internal organizational factors, such as product roadmaps and
staffing needs, as well as external factors, including government regulations and technology
advancement, when making strategic business decisions.

They are ethical and civic-minded.

Strong leaders consider the ethical consequences of the decisions that they make—for
both their customers and their teams.

They practice effective cross-cultural communication.

Respected leaders are able to clearly communicate with individuals, business units, the
entire company, and to stakeholders outside the organization. In an increasingly global economy,
leaders must also acknowledge and respect different communication traditions, Goode says.

3.3 General Personality Traits

What makes someone who they are? Each person has an idea of their own personality
type — if they are bubbly or reserved, sensitive or thick-skinned. Psychologists who try to tease
out the science of who we are define personality as individual differences in the way people tend
to think, feel and behave.

3.3.1 Self-Confidence

Self-confidence can be described as an ability to be certain about one's competencies and

skills. It includes a sense of self-esteem and self-assurance and the belief that one can make a
difference.

Self-confidence is necessary for leaders to take risks and accomplish high goals. Leaders
who are self-confident tend to deal immediately and directly with problems and conflicts, rather
than procrastinating, ignoring, or passing problems to others. Leadership involves influencing
others and self-confidence allows the leader to feel assured that his or her attempts to influence
are appropriate and right.

Self-confidence requires a positive self-image. Self-image is a mental picture we all have

about ourselves. One way to think about self-image is in terms of what is 'real' and what is 'ideal'.

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Many people have goals to move their 'real' self as close to their 'ideal' self as they can. For
example, the 'real' you stumble over your words when you meet the boss, whereas the 'ideal' you
is cool, confident and articulate. Problems can occur when people strive too hard to fit with their
ideal view of self-image and this can mean they underplay their actual characteristics.

Humility

Honesty-humility is a basic personality trait representing “the tendency to be fair and

genuine in dealing with others, in the sense of cooperation with others even when one might
exploit others without suffering retaliation”

Humility is not the boldest of personality traits, but it’s an important one, studies find.
And it’s hard to fake.

Core Self-Evaluations

Self-confidence is one way of looking at the self that contributes to leadership

effectiveness. Extensive research suggests that a set of four other related self-perceptions
also contributes to leadership effectiveness. Core self-evaluations is a broad personality trait
that captures bottom-line self-assessment that is composed of self-esteem, locus of control,
generalized self-efficacy, and emotional stability. All four traits are positively related to
each other. Self-esteem deals with feeling positive toward the self, and generalized self-
efficacy means roughly the same thing as being self-confident in many situations. Locus
of control refers to whether a per- son feels personally responsible for events happening
to him or her, helping the leader deliver a take-charge attitude. Emotional stability refers to
having emotional control, not being neurotic, and having good mental health.

A leader with positive core evaluations is more likely to make decisions more
rapidly and pursue initiatives to implement the decisions. Such a leader will feel
confident, be steady under pressure, and believe that he or she can control the external
environment to some extent.9 One of the qualities admired in Jeff Smisek, CEO of
Continental Airlines Inc., is his reputation for providing stable leadership to the
company. Having a high standing on the trait of emotional stability contributes to stable
leadership.

For Private Circulation only

Trustworthiness

Trust is valuable. It affects everything. Being trusted by others is one of the things you
must have to go far in life and to achieve your greatest success. It is something earned over a
period of time, after consistently being honest, always acting with integrity, never lying or
misleading. It is how you act. It is who you are.

If you want to be a person other people trust, take a look at your actions, the decisions you
make on a daily basis. There are 9 traits of trustworthy people.

They are authentic.

They are consistent.
They have integrity.
They are compassionate.
They are kind.
They are resourceful.
They are connectors.
They are humble.
They are available.

Assertiveness

Being assertive means being able to stand up for your own or other people's rights in a
calm and positive way, without being either aggressive, or passively accepting
'wrong'. Assertive individuals are able to get their point across without upsetting others or
becoming upset themselves.

5 Characteristics of an Assertive Person

They have confidence in themselves. In order to be assertive, you need to know what your
boundaries are; what you like and what you don't like.

They respect the opinions of others.

Assertive people have the ability to validate other's feelings.

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 Assertive individuals are good listeners.
Problem solving and compromise.

Emotional Stability

Emotional stability is a desirable trait. It means you can withstand difficult situations,
handle adversity, and remain productive and capable throughout. Some people get to a certain
point in their lives when they realize that they are not as emotionally stable as they would like to
be.

Emotional stability provides individuals with the ability to take problems they face in
stride. This allows them to continue on to reach their goals. They are able to embrace changes
and use challenges as opportunities to learn and grow as a person.

Developing emotional stability involves an individual establishing at least rudimentary

self-awareness and disability awareness. This awareness does not develop overnight. It is
something that can be modelled and taught to an individual.

Enthusiasm

Being enthusiastic means showing interest in the things that you do and getting pleasure
from them. It means having an active and motivated attitude instead of a passive one. Enthusiasm
means having a good attitude and getting satisfaction from getting things done and pursuing your
dreams.

Enthusiastic people are responsible, but they also find time to have fun at work and in
everything they do. Enthusiastic people make important contributions to those around them,
which is also satisfying. They focus their talent on everything that they like, they follow their
dreams, and they distance themselves from toxic environments.

Another trait of enthusiastic people is their determination to overcome obstacles that stand
in the way of their goals. The best thing about enthusiastic people is that they spread enthusiasm
to everyone around them.

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Sense of Humour

Humour is the best antidote to sadness, stress and depression. It is twice blessed- it
elevates the mood of the humourist and gladdens the hearts of the listeners. The sense of humour
reaches the peak of excellence when the humourist can laugh at himself. This is a capability that
few possess.

Humour is the social glue that binds the society together. It can dispel acrimony and hatred
between people.

Humourists are typically optimistic as they always look at the brighter side of things
unlike the grumpy pessimists who always look at the seamy side of things.

A humorous person can be good company, make a good leader and an efficient employee.

Warmth

A warm person is friendly towards other people, respecting them and caring for them.
With such warmth they create a reciprocal liking, trust and bonding.

Here are 4 things people with warm personalities do, which we can all do, to help us stand out
and shine brightly in this world.

They truly listen

They hold themselves confidently
They are gracious and kind
They talk about others more than themselves

3.4 Task Related Personality Traits

Supporters of trait theory, which emerged in the early 20 th century, claim leaders are
different to non-leaders, because they possess certain innate character traits.

Kirkpatrick and Locke (1996) identify six traits which make leaders differ from non-
leaders, including:

Drive;

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 The desire to achieve;
Honesty/integrity;
Self-confidence;
Cognitive ability; and
Knowledge of the business.
Other, less important traits include charisma, creativity/originality and flexibility.
Task-related personality traits are associated with task accomplishment and include:
Courage
Locus of control
Passion
Emotional intelligence
Flexibility

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3.4.1 Passion for the Work and the People:

A dominant characteristic of effective leaders is their passion for their work and to some
extent for the people who help them accomplish the work. The passion goes beyond enthusiasm
and often expresses itself as an obsession for achieving company goals. Passion for the work is
especially evident in entrepreneurial leaders and small-business owners who are preoccupied
with growing their business. Being passionate about the nature of the business can be a major
success factor in its survival. One of the ways for an entrepreneur to inject passion into a
business is to tell a creation story that inspires people to understand how the company’s product
or cause will make the world a better place.

Emotional Intelligence:

Leadership effectiveness is impacted by how well a person manages his or her emotions
and how they respond to those of others.

There are four key factors:

Self-awareness The ability to understand your own emotions is the most essential of
the four emotional intelligence competencies. Having high self- awareness allows people to
know their strengths and limitations and have high self-esteem. Resonant leaders use self-
awareness to accurately measure their own moods, and they intuitively understand how their
moods affect others. (Effective leaders seek feedback to see how well their actions are
received by others. A leader with good self-awareness would recognize such factors as
whether he or she was liked or was exerting the right amount of pressure on people.)

Self-management This is the ability to control one’s emotion and act with honesty
and integrity in a consistent and adaptable manner. The right degree of self-management
helps prevent a person from throwing temper tantrums when activities do not go as planned.
Resonant leaders do not let their occasional bad moods ruin their day. If they cannot
overcome the bad mood, they let work associates know of the problem and how long it
might last. (A leader with high self-management would not suddenly decide to fire a
group member because of one difference of opinion.)

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 Social awareness This includes having empathy for others and intuition about
organizational problems. Socially aware leaders go beyond sensing the emotions of
others by showing they care. In addition, they accurately size up political forces in the
office. (A team leader with social awareness, or empathy, would be able to assess
whether a team member had enough enthusiasm for a project to assign it to him. A CEO
who had empathy for a labor union’s demands might be able to negotiate successfully
with the head of the labor union to avoid a costly strike.)

Relationship management This includes the interpersonal skills of being

able to communicate clearly and convincingly, disarm conflicts, and build strong personal
bonds. Resonant leaders use relationship management skills to spread their enthusiasm and
solve disagreements, often with kind- ness and humor. (A leader with good relationship
management skills would not burn bridges and would continue to enlarge his or her
network of people to win support when support is needed. A leader or manager with good
relationship management skills is more likely to be invited by headhunters to explore
new career opportunities.)

It is also helpful to recognize that emotional intelligence has relevance for leaders
other than those in the executive suite. Two studies with students taking a course in
organizational behavior, and assigned small-group projects, examined how emotional
intelligence was related to emergent leadership. Among the dimensions of emotional
intelligence measured, it was found that the ability to understand emotions was the most
consistently related to leadership emergence.34 In other words, the study participants with
the best skill in understanding emotions in others were more likely to be perceived as
having leadership qualities.

Flexibility and Adaptability:

A leader is someone who facilitates change. It therefore follows that a leader

must be flexible enough to cope with such changes as technological advances,
downsizings, global outsourcing, a shifting customer base, and a changing work force.
Flexibility, or the ability to adjust to different situations, has long been recognized as an
important leadership characteristic. Leaders who are flexible are able to adjust to the
demands of changing conditions, much as antilock brakes enable an auto- mobile to

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adjust to changes in road conditions. Without the underlying trait of flexibility, a
person might be an effective leader in only one or two situations. The
manufacturing industry exemplifies a field in which situation adaptability is
particularly important because top executives are required to provide leadership for both
traditional production employees as well as highly skilled professionals.

Internal Locus of Control:

People with an internal locus of control believe that they are the primary cause of events
happening to them. A leader with an internal locus is perceived as more powerful than one with
external locus because he or she assumes responsibility for their actions and for events.

Courage:

Leaders need courage to face the challenges of taking prudent risks and taking
initiative in general. Courage comes from the heart, as suggested by the French word for
heart Coeur. Leaders must face up to responsibility and be willing to put their reputations
on the line. It takes courage for a leader to suggest a new undertaking, because if the
undertaking fails, the leader is often seen as having failed. Courageous leadership has also
been described as gutsy. Many people criticized the late Steve Jobs (the former Apple Inc.
CEO and then Chairman) and his management team when they initiated Apple stores
because they saw no useful niche served by these retail outlets. Apple stores were an
immediate and long-lasting success, vindicating the judgment of Jobs and his team. The
more faith people place in the power of leaders to cause events, the more strongly they
blame leaders when outcomes are unfavorable.

According to Kathleen K. Reardon, courage in business is a special kind of

calculated risk taking that comes about with experience. One of the requirements of taking
an intelligent gamble is having contingency plans. For example, if Apple stores had
failed, the properties could have been sold to other posh retailers, thereby reducing
possible losses.

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 3.5 Leadership Motives

Leaders have an intense desire to occupy a position of responsibility for others and to
control them. This desire is evident in five needs or motives, all of which can be considered task
related.

LEADERSHIP
MOTIVES

Drive & Tenacit Resilien

Power Strong
Achievemen y ce
Motive Ethics
t Motive Motive

3.5.1 Power Motive

Effective leaders have a strong need to control resources. Leaders with high power
motives have three dominant characteristics.

1. They act with vigour and determination to exert their power

2. They invest much time in thinking about ways to alter the behaviour and thinking of others.

3. They care about their personal standing of those around them.

Power Motive is of two types.

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• Personalized power motive: Leaders with a personalized power motive seek power
mostly to further their own interests. They crave the trappings of power, such as status
symbols, luxury, and money. The wealthiest of CEOs purchase luxury condominium
apartments in major cities, even when they have another home. Some leaders with strong
personalized power motives typically enjoy dominating others. Their need for dominance
can lead to submissive subordinates who are frequently sycophants and yes-persons.

Another characteristic of leaders with a personalized power motive is that they do

not worry about everybody liking them. They recognize that as you acquire power, you
also acquire enemies. In the words of successful college football coach Steve Spurrier, “If
people like you too much, it’s prob- ably because they are beating you.”

• Socialized power motive: Leaders with a socialized power motive use power primarily
to achieve organizational goals or a vision. In this context, the term socialized means that
the leader uses power primarily to help others. As a result, he or she is likely to provide
more effective leadership. Leaders with socialized power motives tend to be more
emotionally mature than leaders with personalized power motives. They exercise power
more for the benefit of the entire organization and are less likely to manipulate others
through the use of power. Leaders with socialized power motives are also less defensive and
more willing to accept expert advice. Finally, they have longer-range perspectives.43

It is important not to draw a rigid line between leaders with personalized power
motives and those with socialized power motives. The distinction between doing good for
others and doing good for oneself is often made on the basis of very subjective criteria. A
case in point is Denise Morrison, the CEO of Campbell Soup. The many nutritious,
relatively low-priced foods her company manufactures facilitate the well-being of millions of
people throughout the world. At the same time, Morrison is growing in power and stature
because the company she leads is so successful.

Drive & Achievement Motive

Drive refer to a propensity to put forth high energy into achieving goal. Drive also
include achievement motivation.

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• Leader Achieve through one’s own efforts & take responsibility for success or failure.

• Take moderate risks that can be handled through one’s own efforts.

• Receive feedback on their level or performance.

• Introduce novel, innovative, or creative solution.

• Plan and set goals.

Strong Work Ethics Motive

• Effective leaders have strong work ethics.

• Leaders have firm belief in the dignity of work value hard work.

• They believe that group task is worthwhile

Tenacity

Being tenacious means striving to accomplish, regardless of obstacles. Successful leaders

are often tenacious in their work practices. One must now draw the line between successful
leaders and good leaders. A successful leader may be extremely tenacious by squashing all those
that get in their way and employing tactics that do not promote a healthy working environment.

Whilst a successful leader may be extremely tenacious and create a large profit, it may
not be as sustainable as a good leader that is able to use tenacity to a degree that allows healthy
leader-follower relationships to thrive. When studying good leadership, one should therefore
understand the importance of tenacity and its benefits as well as its associated limits and
dangers.

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Resilience

Resilience is the human capacity to meet adversity, setbacks and trauma, and then
recover from them in order to live life fully. Resilient leaders have the ability to sustain their
energy level under pressure, to cope with disruptive changes and adapt.

Resilience is a crucial characteristic of high- performing leaders. Leaders must cultivate it

in themselves in order to advance and thrive. They also carry the responsibility for helping to
protect the energy of the people in their teams. Leadership is sustainable only if individuals and
teams are able to consistently recover high energy levels.

3.6 Cognitive Factors & Leadership:

Cognitive factors are also important for leadership success. Cognitive factors are those
factors relating to the leader’s cognition; that is, the mental abilities and dispositions that impact
a leader’s actions to inspire people, bring about constructive change, and solve problems
creatively. These factors include intelligence, knowledge of the business, creativity, insight, and
farsightedness/conceptual thinking.

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3.6.1 Cognitive (or Analytical) Intelligence

Being very good at solving problems is a fundamental characteristic of effective

leaders in all fields. Business leaders, for example, need to under- stand how to analyze
company finances, use advanced software, manage inventory, and deal with international
trade regulations. Research spanning 100 years has demonstrated that leaders receive higher
scores than most people on mental ability tests, including IQ (a term for a test score that for
many people is synonymous with intelligence). A meta-analysis of 151 studies found a
positive relationship between intelligence and job performance of leaders in many different
settings. The relationship is likely to be higher when the leader plays an active role in
decision making and is not overly stressed. The researchers also found support for the old
idea that intelligence contributes the most to leadership effectiveness when the leader is not
vastly smarter than most group members. Again, group members prefer that their leaders
be smarter than the average group member even if the difference is not huge.

Knowledge of Business and Technology

Intellectual ability is closely related to having knowledge of the business or the

key task the group is performing. An effective leader has to be technically competent in
some discipline, particularly when leading a group of specialists. It is difficult for the leader
to establish rapport with group members when he or she does not know what the group
members are doing and when the group does not respect the leader’s technical skills.

The importance of knowledge of the business is strongly recognized as an attribute of

executive leadership. Leaders at every level are expected to bring forth useful ideas for
carrying out the mission of the organization or organizational unit. A representative example
is that according to a team of researchers, a key requirement for the chief supply chain
management officer is “end-to-end understanding of the supply chain.”

Knowledge of the business or the group task is particularly important when

developing strategy, formulating mission statements, and sizing up the external
environment.

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Creativity

Many effective leaders are creative in the sense that they arrive at imaginative and
original solutions to complex problems. The marketing vice president of Facebook
presented as an example of high intelligence also illustrates the importance of creative
thinking. Creative ability lies on a continuum, with some leaders being more creative than
others. At one end of the creative continuum are business leaders who think of innovative
pro- ducts and services. One example was the late Steve Jobs of Apple Inc. Jobs contributed
creative product ideas to his company including endorsing the development of the iPod,
followed by the iPhone and iPad. Even while on medical leave, and working from home,
Jobs had been involved in product development and company strategy formulation.

At the middle of the creativity continuum are leaders who explore imaginative—but
not breakthrough—solutions to business problems. At the low end of the creativity
continuum are leaders who inspire group members to push forward with standard solutions
to organizational problems.

Insight

Another important cognitive trait of leaders is insight, a depth of under- standing that
requires considerable intuition and common sense. Intuition is often the mental process
used to provide the understanding of a problem. Insight helps speed decision making. Jeff
Bezos of Amazon.com believes that the bigger the decision, such as whether or not to enter
a particular business, the greater the role of insight and intuition.

Insight into people and situations involving people is an essential characteristic of

managerial leaders because it helps them make the best use of both their own and others’
talents. For example, it helps them make wise choices in selecting people for key
assignments. Insight also enables man- agers to do a better job of training and developing
team members because they can wisely assess the members’ strengths and weaknesses.
Another major advantage of being insightful is that the leader can size up a situation and

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adapt his or her leadership approach accordingly. For instance, in a crisis situation, group
members welcome directive and decisive leadership. Being able to read people helps the
manager provide this leadership.

You can gauge your insight by charting the accuracy of your hunches and
predictions about people and business situations. For example, size up a new coworker
or manager as best you can. Record your observations and test them against how that
person performs or behaves many months later. The feedback from this type of exercise
will help sharpen your insights.

Farsightedness and Conceptual Thinking

To develop visions and corporate strategy, a leader needs farsightedness, the ability
to understand the long-range implications of actions and policies. A farsighted leader
recognizes that hiring talented workers today will give the firm a long-range competitive
advantage. A more shortsighted view would be to hire less-talented workers to satisfy
immediate employment needs. The farsighted leader/manager is not oblivious to short-
range needs but will devise an intermediate solution, such as hiring temporary workers until
people with the right talents are found.

Conceptual thinking refers to the ability to see the overall perspective, and it makes
farsightedness possible. A conceptual thinker is also a systems thinker, because he or she
understands how the external environment influences the organization and how different
parts of the organization influence each other. A good conceptual thinker recognizes how
his or her organizational unit contributes to the firm or how the firm meshes with the outside
world.

The CEO of PepsiCo, Indra Nooyi, believes that the single most important skill
needed for any CEO today is strategic acuity (meaning conceptual thinking and
farsightedness). She notes that over twenty-five years ago, when she was chosen to run the
European business for PepsiCo, Roger Enrico, the company CEO at the time, said, “I’m
pulling you back.” When Nooyi asked why, Enrico replied, “I can get operating executives

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to run a profit-and-loss-center. But I cannot find people to help me re-conceptualize
PepsiCo. That’s the skill in shortest supply.”

The accompanying Leader in Action insert gives you a CEO in the sports apparel
field to study in terms of his personal attributes including cognitive skills.

3.7 Strengths and Limitations of Trait Approach

A compelling argument for the trait approach is that there is convincing evidence that
leaders possess personal characteristics that differ from those of non-leaders. Based on their
review of the type of research reported in this chapter, Kirkpatrick and Locke concluded:
“Leaders do not have to be great men or women by being intellectual geniuses or omni-
scient prophets to succeed. But they do need to have the ‘right stuff’ and this stuff is not
equally present in all people.” The current emphasis on emotional intelligence, charisma,
innovative thinking, and ethical conduct, which are really traits, attitudes, and behaviors,
reinforces the importance of the trait approach.

Understanding the traits of effective leaders serves as an important guide to

leadership selection. If we are confident that honesty and integrity, as well as creativity and
imagination, are essential leadership traits, then we can concentrate on selecting leaders with
those characteristics. Another important strength of the trait approach is that it can help
people prepare for leadership responsibility and all of that accompany it. A person might
seek experiences that enable him or her to develop issues vital characteristics such as self-
confidence, good problem-solving ability, and assertiveness.

A limitation to the trait approach is that it does not tell us which traits are
absolutely needed in which leadership situations. We also do not know how much of a
trait, characteristic, or motive is the right amount. For example, some leaders get into
ethical and legal trouble because they allow their ambition to cross the borderline into
greed and gluttony. In addition, too much focus on the trait approach can breed an elitist
conception of leadership. People who are not outstanding on key leadership traits and
characteristics might be discouraged from seeking leadership positions.

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 A subtle limitation to the trait approach is that it prompts some people to believe that
to be effective, you have to have a high standing on almost every leadership characteristic.
In reality, the majority of effective leaders are outstanding in many characteristics but are
low on others. Another possible limitation to the trait approach is that some leaders
might be convinced that they must be strong on one trait at the exclusion of its polar
opposite, such as always being extraverted and avoiding introversion. Peter Grauer, the CEO
of Bloomberg Ltd., believes that a combination of opposite traits is often required for
leadership effectiveness. For example, a leader who is a big-picture thinker might also
need to be strong at details. He says that such a leader can give direction on little things
and also encourage big ideas.

A balanced perspective on the trait approach is that certain traits, motives, and
characteristics increase the probability that a leader will be effective, but they do not
guarantee effectiveness. The leadership situation often influences which traits will be the
most important. At the same time, different situations call for different combinations of
traits. Visualize yourself as managing a restaurant staffed by teenagers who had never
worked previously. You would need to emphasize warmth, enthusiasm, flexibility, and
adaptability. Less emphasis would be required on cognitive skills and the power motive.

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 MODULE 4: ORGANIZATIONAL POWER & POLITICS
Syllabus:
Power – Meaning
Dynamics of Power – Distribution, Dependency, Uncertainty, Compliance, Indicators,
Power determinants, Power consequences, Influence, Sexual Harassment,
Paraphernalia, Reputation & Power shifts
Sources of Power – Interpersonal Sources of Power & Structural Sources of Power
Effective use of Power
Power Tactics – Individual and Intra-group Tactics, Inter-group Power Tactics
Politics - Meaning, Essence of Politics Types of Political Activities – Attacking or
Blaming Others, Selectively distributing information, Using Experts, Controlling
information channels, Game Playing, Forming coalitions, Increasing indispensability,
Association with line executives, Controlling agenda, Managing impressions
Pros & Cons of Organizational Politics
Ethics of Power & Politics
INTRODUCTION:

The role of power in organizational change efforts has been recognized as being important
since the early 1970s and conceptual thinking about the relationship between the two has
continued to evolve and been enriched by different underlying theoretical assumptions. In
this chapter we review the topic and explore various different approaches to understanding
power and change. The chapter is structured around a model that differentiates four different
perspectives on power and is built on two polarities or dynamic tensions between manifest vs
latent power and personal vs collective power. By conceptualizing four fundamentally
different perspectives of power, various different approaches to organizational change are
suggested. In this chapter, we address both the dominant and better-developed perspectives
on power and change as well as newer and more emergent perspectives. We conclude by
suggesting that transformational change in organizations can be more fully understood and
enabled through the simultaneous recognition of the tensions between different perspectives
on power

Giddens describes two perspectives on power and says: One is that power is best
conceptualized as the capability of an actor to achieve his or her will, even at the expense of
others who might resist him—the sort of definition employed by Weber among many other
authors. The second is that power should be seen as a property of the collectivity: Parson’s
concept of power, for instance, belongs in this latter category.

Meaning of Power: Power is the ability to influence people and events. The term power may
be applied to individuals, groups, teams, departments, organizations and countries.

Definitions of Power Like many other words in english language, power has no single
definition. A few definitions of power are stated below: (i) “Power is the ability to employ
force and mobilize resources, energy and information on behalf of a preferred goal” –
Gbadamosi (1996)

(ii) “Power is the probability that a person can carry out his or her own will despite
resistance” – Max Weber (1947)

(iii) “Power is the ability of persons as groups to impose their will on others despite
resistance through deterrence either in the form of withholding regularly supplied rewards or
in the form of punishment inasmuch as the former, as well as the latter, constitutes in effect
negative sanction” – Blan (1964)

From the above discussions, the following points emerge:

(a) Power is based on two-tier concept of influencing others and being influenced.

(b) Power may be potential or enacted.

(c) Power represents the capacity, ability, etc. to influence the behaviour of other people.

Understanding Power: Power refers to a capacity that A has to influence the behavior of B
so B acts in accordance with A’s wishes.2 Someone can thus have power but not use it; it is a
capacity or potential. Probably the most important aspect of power is that it is a function of
dependence. The greater B’s dependence on A, the greater A’s power in the relationship.
Dependence, in turn, is based on alternatives that B perceives and the importance B places on
the alternative(s) A controls. A person can have power over you only if he controls something
you desire. If you want a college degree and have to pass a certain course to get it, and your
current instructor is the only faculty member in the college who teaches that course, he has
power over you. Your alternatives are highly limited, and you place a high degree of
importance on obtaining a passing grade. Similarly, if you’re attending college on funds
totally provided by your parents, you probably recognize the power they hold over you.
You’re dependent on them for financial support. But once you’re out of school, have a job,
and are making a good income, your parents’ power is reduced significantly. Who among us
has not known or heard of a rich relative who is able to control a large number of family
members merely through the implicit or explicit threat of “writing them out of the will”?

As anyone with young children (one of the most dependent groups) has doubtlessly
noted, dependency increases the incentive to lie. But is the link as strong in less overt or
ongoing situations? One study explored the link between dependency and lying in a
controlled experiment with adults who had no outside relationship with one another.
Researchers gave one group of research subjects bigger offices and more authority, whereas
another group received smaller offices and less authority. Then half the subjects in each
condition were told to steal a $100 bill and convince an interviewer they hadn’t taken it. If
they were able to fool the interviewer, they could keep the money. In the interviews, those in
positions of power showed fewer signs of dishonesty and stress like shoulder shrugs and
stuttering when lying—perhaps because they felt less dependent on others. Recall that this
simulation involved only hypothetical, experimentally manipulated power, so imagine the
effects when real power is on the line.3 This study also suggests that powerful people might
be better liars because they are more confident in their status, and less willing to acknowledge
dependency on others.

POWER DYNAMICS: The dynamics of power can be studied from several angles, viz.,
distribution, dependency, uncertainty, compliance, indicators, power determinants, power
consequences, symbols, reputation and power shifts.
 Distribution
Dependency
Uncertainty
Compliance
Indicators
Shifts
Reputation
Trappings
Consequences
Determinants
paraphernalia
sexual harassment

1. Distribution: About power distribution, the following observations can be made:

i. There is no rationale in the distribution of power among organizational
members. Some may have more powers than others.
ii. Those in power try to grab more of it. They strongly resist any attempt to
weaken the power they possess.
iii. An individual cannot have power at all times and at all places. He or she may
be forced to forgo his or her power.
2. Dependency: The dependency part of dynamics of power can be described as
follows:
i. As mentioned earlier, power largely depends on dependency relationship. The
greater X depends on Y, the greater the power of Y on X.
ii. The greater the dependency of an organization on a limited number of
individuals, the greater the power these individuals enjoy.
iii. A person who cannot be easily displaced enjoys more power than others
whose services can be easily replaced.
3. Uncertainty: the uncertainty element of dynamics of power can be elaborated on
following lines:
i. Organizations seek to avoid uncertainty as far as possible.
ii. Uncertainty depends on the nature of the organizations. In a marketing firm,
for instance sales executives confront uncertainty.
4. Compliance: compliance element of dynamics of power can be described as follows:
i. Of all the types of power, people generally comply with legitimate power
ii. People perceive reward and coercive powers as weak for complying with
manager’s requests.
5. Power Indicators: Indeed, power is being most effective when it is not visible.
People tend to resist the use of power when they see themselves being influenced in a
way that is contrary to their own desire, however, if the attempt to influence appears
to be legitimate and rational, we are more willing to comply and subject ourselves to
the wishes of others.
6. Power shifts: There have been perceptible shifts in power equations in our society.
Several of these power shifts deserve brief explanation.
One shift relates to the relationship between employers and employees. The deeply
held notion is that employers have the power as it is they who give jobs to the
employees. But it is changing. Now it is the employees who are calling the shots.
Organizations are in need of talented people and such people are not available in
requisite numbers.
Power is shifting from large companies to medium-sized companies. Advantages of
size are fading and giant firms will be regarded as a historical phenomenon. However,
in an economy based on information rather than on tangible products, economies of
scale in manufacturing are less valuable than they used to be.
7. Reputation: another way of assessing power in organizations is to ask members of
the organizations who possess the greatest power or exerts the greatest influence. This
method measures the reputation on organizational members as perceived by others
and assumes that people are knowledgeable about power relationships and willing to
report what they know. These assumptions are often incorrect, especially when power
is effective, because then it is not perceived as an exercise of power. Consequently,
the potential activities of the most powerful and influential individuals may be
understated or overlooked by both themselves and others.
 8. Trappings: The power of different individuals can be assessed by examining how
many paraphernalia of power they possess. Trappings include such things as titles,
office size and location, special parking privileges, special eating facilities. Since the
executives offices are typically on the top floor of a building, the location of offices
on other floors often reflect the relative power of the office holders.
9. Consequences of power: Managers who have power need to use it. Two ways are
generally used: influence and harassment
Influence: refers to any behaviour that seeks to alter someone’s attitude and
behaviour. In fact, influence is power in action. Influence is the very fundamental
process of OB.
Harassment: also called workplace harassment is becoming a major problem
10. Determinants of power: one method of assessing power focuses on the potential to
exert influence and consists of measuring how many determinants of power are
available to each member. As will be stated later, there are six bases of personal
power. One of the bases of power is expertise. Therefore, individuals who possess
better knowledge and expertise can exert better influence in situations where their
knowledge is important.
11. Paraphernalia: the power of different individuals can be assessed by examining how
many paraphernalia of power they possiss. Trappings include such things as titles,
office size and location, special parking privileges, special eating facilities and so on.
Since the executive offices are typically on the top floor of a building the location of
offices on the other floors often reflect the relative power of the office holders.
12. Sexual harassment: An unwelcome sexual advance, request for sexual favours or
other unwelcome conduct of a sexual nature which a reasonable person would
anticipate would cause a person to feel offended, humiliated or intimidated
constitutes sexual harassment.

Sources of power: In organisations, power flows from two categories of sources

i. Interpersonal
ii. Structural

Interpersonal sources of power: It includes-

 Number of people: numbers add strength to an association. Groups of well organized
people can successfully defend themselves or pursue their goals, constraints
notwithstanding.
Reward Power: it refers to an individual’s ability to influence other’s behaviours by
rewarding their desirable behaviours. Managers have the power to distribute
organizational rewards such as pay, promotion etc.,
Coercive power: is an individual’s ability to influence other’s behaviours by
punishing their undesirable behaviours. Manager have coercive power to reprimand,
demote and fire employees.
Legitimate power: this refers to a manager’s ability to influence subordinate’s
behaviours because of manager’s formal position in the organisations. Not only
managers, all employees have some legitimate power such as right to ask others for
information that will help them perform their jobs.
Expert power: legitimate, reward or coercive power originates from the position a
person holds in an organization. In contrast, expert power stems from the person. It is
an individual’s ability to influence other’s behaviours because of recognized
competencies, talents or specialized knowledge.
Referent power: It is an individual’s ability to influence other’s behaviours as a
result of being respected, admired or liked. Like expert power, referent power comes
from within the person. Referent power is associated with charisma of the person.
Rational persuasion: some people are gifted with an ability to influence others
through well thought out arguments equally presented powerfully. Such people wield
more power. Be it negotiating a deal or bargaining for a new wage agreement, these
persuaders are at their best.
Charisma: charismatic individuals possess such powerful personalities that they put
others in a kind of trance. Charismatic individuals are capable of making others do
what is expected of them.

Structural sources of power: It includes-

Knowledge as power: It is widely known that knowledge is power. Knowledge may

be understood as a conclusion or analysis derived from data and information. Data are
facts statistics and specifics. Information is the context In which date are placed.
Resources as power: It is well known that power stems from
a. Access to source of information and support
 b. The ability to resources- money, human resources, technology, materials,
customers and the like. As top management allocate resources to lower level
managers, obviously, the allocators of resources have power over their
subordinates
Decision-making as power: The degree to which individuals can influence decision-
making determines the amount of power acquired. They might influence the goals
being developed, premises being used in evaluating an issue, alternatives being
considered, outcomes being projected and so on. The ability to influence the decision-
making process is a subtle and often overlooked source of power.
Effective Use of power:
A manager seeking to get things done in a group or organization needs power. Effective use
of power is however, a challenge for managers and employees alike. Power needs to be used
in -such a way that the needs of the organization and of the employees are properly met. If
the use of power is not carefully managed, powerful individuals tend to exploit those with
less power and substitute their self-interests for the legitimate interests of the organization.
Managers and employees who use power effectively possess five characteristics.
1. Managers and employees understand both the interpersonal and the structural sources
of power and the most effective methods of using them to influence people. For
example, professionals such as engineers, doctors, accountants and scientists tend to
be more influenced by expertise than by other interpersonal sources of power.
Effective managers and employees often recognize the structural and situational
problems that exist in a power relationship and modify their own behaviours to fit the
actual situation.
As a result, they tend to develop and use a wide variety of power sources and
influence strategies. Some ineffective managers rely too much on one or a few power
bases or influence strategies.
2. Managers understand the nature of the exchange process underlying influencing
strategies. They are concious of the fact that, over time, reciprocal exchanges are a
must and in their absence, hard feelings will result and the ability to influence others
will decline.
3. They know what is desirable behaviour and what is undesirable behaviour in
acquiring and using power. They are aware of the fact that power is a double-edged
sword. The misuse or lack of understanding of a source of power can destroy its
effectiveness. For example, individuals tend to lose referent power by behaving in
 ways that are inconsistent with characteristics or traits that are attractive to others. If
used effectively, power can be instrumental in bringing about organizational
effectiveness.
4. The managers and employees seek positions that allow the development and use of
power. In other words, they choose jobs that involve the crucial issues and concerns
of an organization. These jobs demand the use of power to influence other’s
behaviours. Indeed, such positions offer opportunities to acquire power.
5. They use maturity and self-control in applying their power. They understand that their
actions influence the behaviors and lives of others. Managers use power that benefits
the organization, rewards honest employees and punishes guilty.

Power Tactics

People use different tactics to gain power. Power tactics are used by individuals on their own,
within groups(intra-groups), and between groups(inter-group) in order to influence people
and events. Influence can be used in a positive or negative way. When used positively, we
can expect beneficial outcomes.

POWER
TACTICS

INDIVIDUAL AND INTER-GROUP OTHERS

INTRA-GROUP

Uncert integra Rational

friendlines substit Legitimacy Inspirational Consultati
Asserti ainity tive Persuasion Exchange Personal Pressure Coalitions
s or Rational utabilit appeals on
veness Sanctio Higher Bargai coalition absorp import Appeals
Ingratiatio ity ning tion y ance
ns authori
n
ty

INDIVIDUAL AND INTRA-GROUP: As many as seven tactics have been identified under
this category:

1. Assertiveness: this entails setting a deadline for others to comply with a request,
ordering others to do what they are expected to do, emphasising the importance of
complying with the request, and repeatedly reminding others of their obligations to
perform.
2. Friendliness or ingratiation: this tends to make a person favourably disposed to
comply with a request. It may be flattery by lavishing praise on the person prior to the
 request, exaggerating the importance of complying with the request, acting in a
friendly and humble way when seeking the person’s co-operation, or waiting till the
person is in a receptive mood before striking.
3. Rationality: rationality amounts to using facts and information in a logical way so
that the request for compliance looks logical and well prepared. The originator of the
request is projected as a competent person.
4. Sanctions: this amounts to the use of organizational rewards and punishments for
action. Rewards may include salary raise or promotion. Subjective rating in
performance appraisal or withholding promotion may be the punishments.
5. Higher authority: this consists of efforts to secure support from people further up the
organizational hierarchy, and may be exemplified by securing the informal support of
superiors and others in higher positions.
6. Bargaining: it includes give and take through a process of negotiation. Additionally,
the person seeking the favour may remind the other person of the benefits the former
has bestowed on him or her in the past in order to get the work done.
7. Coalition: this involves getting help from other parties in the organization, by
building up alliances with subordinates and co-workers. There is strength in numbers,
which is manifested when employees join unions.

INTER-GROUP POWER TACTICS:

Inter-Group power Tactics include uncertainty absorption, substitutability and integrative

importance.

1. Uncertainty absorption: There are certain expert groups, industrial relations, for
example, in organisations whose services can be used in times of need. When used,
such expert groups absorb the uncertainty normally associated with such matters.
Consequently, the expert group gains power over the users of its service.
2. Substitutability: in the example cited above, if the user of the service can find a
substitution provider (for example, an outside consultant), then the power of the
specialist can be reduced or eliminated. However, external providers are usually not
substituted, for internal experts provided such groups exist.
3. Integrative importance: Integrative importance arises when a group’s services-
central computing services, for example- are needed to a significant extent by other
groups within the organization in order that the latter can function effectively. Such a
 provider wields a lot of inter-group power. The extent of power is less if the group
providing the services is needed only to a limited extent.

OTHERS:

1. Legitimacy: Relying on your authority position or making a request accords with

organizational policies or rules.
2. Rational Persuasion: Presenting logical arguments and factual evidence to
demonstrate a request is reasonable.
3. Inspirational Appeals: Developing emotional commitment by appealing to a
target’s values, needs, hopes, and aspirations.
4. Consultation: Increasing the target’s support by involving him in deciding how you
will accomplish your plan.
5. Exchange: Rewarding the target with benefits or favours in exchange for following a
request.
6. Personal Appeals: Asking for compliance based on friendship or loyalty.
7. Pressure: Using warnings, repeated demands, and threats.
8. Coalitions: Enlisting the aid or support of others to persuade the target to agree.

Some tactics are more effective than others. Rational persuasion, inspirational appeals,
and consultation tend to be the most effective, especially when the audience is highly
interested in the outcomes of a decision process. Pressure tends to backfire and is
typically the least effective of the nine tactics.
POLITICS
Closely related to power is politics. Politics relates to the ways people gain and use power in
organisations. In theory, politics has no place in organisations. Organisations are supposedly
are rational entities engaged in the pursuit of specific goals. But in reality, organisations are
replete, with political activities. In an economy, money is the medium of exchange. In
organisations politics is the medium of exchange. Managers need to be political beings in
order to meet their objectives.
Individuals, subunits and coalitions in an organisation engage in political activity to enhance
their power. Even if organisational members or subunits have no personal desire to play
politics they still need to understand how politics operates because sooner or later they will
come against a master player of the political game. In such situations, political managers
(those who shun politics) get all the tedious assignments or the responsibility for projects that
do little enhance their career prospects. Astute political managers get the visible and
important projects that bring them into contact with powerful managers and allow them to
build up their power base, which they can use to enhance their chances of promotion.
Essence of Politics
Politics, in general, is characterised by
Disagreement,
Diversity,
Scarcity,
Interest
And Others
If all organisational members agreed all the time, there would be no politics. In other words,
the potential for political activity arises wherever disagreement exists. Core factor which can
trigger disagreement is diversity. Complex organisations comprise subunits. Some units are
more powerful than others and each may have different goals. Diverse goals can create
conflict. For example, software engineers may want to provide the organisation with a highly
sophisticated and technologically advanced IT system. Line managers may simply want a
design which enables them to communicate with one another.
Scarcity can prompt political activity if there are competing claims upon resources. If
department A requires ten additional items and department B demands the same number, and
if budget is sufficient for only ten between them, then clearly scope for conflict exists.
A central feature of politics is the notion of interest. Interests are defined as positions people
want to protect or goals they seek to achieve. If no one cares whether company A is awarded
a contract for supplies in preference to company B, then there is no disagreement about the
matter and potentially, no politics.
Some individuals are born Machiavellians. Such people are more inclined to indulge in
political behaviour. They believe that there is nothing wrong in using others for selfish
interests. Some others are gifted with unique skills that make them get ahead, no matter what.
They are socially adopted, highly popular, extroverted, self-confident, aggressive, ambitious,
devious, intelligent, and articulate.
Organisational politics is not confined to only individuals. Corporates themselves are political
arenas. Price wars, piracies, imitations, and mergers and acquisitions are too obvious needing
any recount. These are but a few political activities.
Types of Political Activities
Organisational behaviour experts have conveniently grouped all political activities into ten
categories
Attacking or Blaming Others: Perhaps, the most direct and nastiest form politics is
attacking and blaming others. This includes giving rivals a bad image in the eyes of decision
makers. Decision makers, particularly weaklings, have weakness for such diatribes. The
weakness further exploited by the political activists to further their interests.
Selectively Distributing Information: Information is a political tool as well as a source of
power. People strategically manage the distribution of information to shape perceptions, limit
the potential performance of rivals, or further enhance their power base. Information politics
so involves hoarding information. Knowledge is power- obviously, people do not desire to
share the knowledge with others and thus erode their power base.
Controlling Information Channels: Power enables an executive to control the interactions
among subordinates as well as the topics of those discussions. The executive might
discourage employees in different work units from talking directly to each other because this
might threaten the executive's power and job status. Similarly, committee leaders might
organise meeting agendas to suit their personal interests. If leaders want to avoid a decision
on a particular topic, they might place the issue near the bottom of the agenda so that the
committee either does not get to it or devotes little time and attention to the issue.
Forming Coalitions : A coalition is an informal group that attempts to influence people
outside the group by pooling the resources and power of its members. Coalitions are often
built around a trade-off: A supports B on an issue of interest to B in return for B supporting A
on an issue of interest to A. Coalitions can be built through many levels in an various
functions or organisation, between divisions, and between important external or internal
stakeholders. A Coalition is a political tactic because it pools the power of several people
towards a objective that each member common is unable to influence alone. By
demonstrating their strengthen numbers, coalitions also create a sense that an issue has broad
appeal and therefore deserve legitimate support. Athough coalitions are usually formed with
good intentions, one with them is that problem than commitment they put pressure on others
to change, thereby creating compliance rather to the change. However, coalitions can help
people get things done cannot be accomplished alone.
Increasing Indispensability: One important political activity that individual or sub unit can
use to increase power is to become indispensable to the organization. Increasing non-
substitutability or increasing centrality could lead to Indispensability
Associating with Powerful Line Executives: Another political tactic is by attaching oneself
to powerful line executives. By supporting a powerful manager and making oneself
indispensable to that person, it is possible to rise up the organisation's ladder and grab power
too. Top managers often become mentors to aspiring lower-level managers because planning
for the managerial succession is an important task of higher level managers. CEOs typically
promote their friends, not their enemies. Managers who have taken the initiative to develop
skills that make them stand out from as the crowd and who are central and non-substitutable
have better chances of being selected by top managers who are seeking individuals to groom
as their successors.
Managing Impressions: Impression management is the practice of actively shaping one's
public image. Many impression management activities are done routinely to satisfy the basic
norms of social behaviour. Others are political tactics because they are used deliberately to
get one's way. Some political tactics described earlier- including blaming others, forming
coalitions and filtering information- are impression management activities. Another well-
known management impression tactic is to manage one's behaviour and appearances so that
others develop a desired image of the individual. Wearing dress, boss pleasing, saluting the
boss, and the like are a part of the impression management tactic.
Game playing: Managers operate within the rules of the organisation when playing games.
example, in circumstances where the manager's preferred action is to sit on the fence, he or
she could arrange to visit an important customer at a time that coincides with a critical
internal meeting, at which the manager should have declared his or her stand on some policy
issue.
Controlling the agenda: The manager may not feel comfortable with the prospect of having
a particular controversial issue thoroughly discussed and acted on at a meeting. The issue
could be placed in the agenda as the last item, or deleted from the agenda, with the manager
claiming that it is too early to discuss such an important issue.
Using outside experts: A manager may achieve his or her objective by using an outside
Consultant who happens to share his or her views about the matter under review. Although
the consultant may approach the assignment in a professional manner, the recommendations
made may be unconsciously biased towards a course of action preferred by the manager
ORGANISATIONAL POLITICS- GOOD OR BAD?
Before answering the question whether organisational politics is good or bad, let us admit
that organisational members, as stated earlier, do engage themselves in political activities. In
other words, political activity is a part of organisational life.
Certain conditions favour organisational politics. Core of these conditions is scarce resources.
When budgets are slashed, people rely on political tactics to safeguard their resources and
maintain the status quo. Along with resource scarcity, organisational politics flourish when
resource allocation decisions are based on ambiguous, complex or lack of rules. This occurs
because decision makers are given more discretion over resource allocation. Potential
recipients of those resources obviously use political tactics to influence factors that should be
considered in the decision.
Organisational politics also becomes commonplace when it is tolerated and encouraged by
the organisation. Executives may be role models of bad corporate politicians to people further
down the hierarchy. Firms sometimes inadvertently promote people who are politicians to run
the affairs. If left unchecked, organisational politics can paralyse an organisation as people
focus more on protecting themselves than discharging their duties. Political activity becomes
self-reinforcing unless the conditions supporting political behaviour are altered.
 Managers and employees are more likely to act politically when: (i) decision making
procedures and performance measures are uncertain and complex, and (ii) competition Scarce
resources is strong. Conversely, in more stable and less complex environments wnet decision
making processes are clear and competitive behaviour is less, excessive political behaviour is
unlikely.
Performance appraisal process is a fertile ground for political behaviour. Performance is
deliberately undervalued because of scarce resources (pay, bonuses, benefits, etc.). Appraisal
of performance assumes the role of a political tool for other reasons too. For example,
managers take into consideration the daily interpersonal dynamics between them and their
subordinates. These considerations cloud the objectivity in appraisal process.
Personal characteristics of individuals also promote political behaviour. As stated in chapter
on personality, Machiavellian individuals indulge in political activities. People with high
Machiavellian values believe that deceit is a natural and acceptable way to influence others.
They seldom trust co-workers and frequently use power to manipulate others towards their
personal goals, even if these goals conflict with the organisational goals.
Coming to the question-organisational politics, good or bad-the answer is both. Beneficial
effects of organisational politics include career advancement, recognition and status for
individuals looking after their legitimate interests, and achievement of organisational goals
getting the job done -as a result of the normal political process in the organisation. In
addition, organisational politics serves several useful purposes such as overcoming personal
inadequacies, coping with change, channeling personal contacts and substituting for formal
authority.
Overcome personnel inadequacies: There are several inadequacies in personnel and
consequently mismatches occur between people and positions in organisations. Even in the
best managed companies, mismatches arise among managers who are learning, lacking
needed training and skills, overqualified, or lacking resources needed to accomplish their
assigned tasks. Organisational politics provide a mechanism for circumventing those
inadequacies and getting the job done. Cope with change: Changes in the environment and
technology of an organisation often come more quickly than an organisation can restructure.
Channel personnel contacts: In larger organisations, it is well-nigh impossible to know the
persons in very important position. Yet managers need to influence the individuals
throughout the organisation. The political network can provide the necessary access
Substitute for formal authority: When a person's formal authority breaks down or fails to
apply a situation, political actions can be used to prevent a loss of influence Managers may
Use political behaviour to maintain operations and achieve task continuity in circumstances
where the failure of formal authority may otherwise cause problems.
Henry Mintzberg proposes five functional roles of organisational politics. Most of them listed
correspond to statement above.
Three of them are new and hence are stated below
(i) The system of politics can act in a Darwinian way to ensure that the of the
strongest members organisation are brought into positions of leadership.
 (ii) The system of politics can ensure that all sides of an issue are fuliy debated,
whereas the other systems of influence tend to promote only one.
(iii) The system of politics can pave the path for the execution of decisions

It was Kautilya, nearly 2,300 years ago, who advocated political behaviour. How Kautilya
advocated measures for king to deal with treacherous high officials is revealing. For when on
a pleasure example, trip outside city, the King shall honour the traitors with accommodation
near his own. A woman of bad character, dressed like the queen, shall be caught in their
apartment. For this alleged attempt to molest the queen, they shall be killed.
Similarly, if the traitor is addicted to witchcraft, a spy in the guise of a holy man inveigle
should him into a secret site, during which he shall be killed by poison or with an iron bar.
The death shall be attributed to some mishap during the secret rites.
Again, a spy in the guise of a doctor may make the traitor believe that he is malignant or
incurable disease suffering from a and kill him by poisoning his medicine or diet.
Assuming two traitors have a deep rooted quarrel between them, the same shall be
exacerbated by secret agents who shall either set fire to fields, houses or thrashing floors or
attack the kinsmen, relatives or draught animals of one or the other. Then the assassins shall
kill one of the traitors and declare that he deserved it because he was quarreling with other.
For this alleged offence, the other shall also be punished.
The Italian philosopher, Niccolo Machiavelli (1513) also advocated political behaviour to
acquire power. Popularly called Machiavellianism, the strategy calls for seizing and holding
on to power, somehow. His guiding principles were:
Never show humility: arrogance is for more effective in dealing with others.
Morality and ethics are for the week: powerful people feel free to lie, cheat and
deceive whenever it suits their purpose.
It is much better to be feared than loved.

In general, Machiavelli urged those who desired power to adapt a totally pragmatic approach
to life. Let others be swayed by considerations of friendship, loyalty or fair play he
suggested; a truly successful leader should always be above those factors. In short, he or she
should be willing to do whatever it takes to get his or her way!
Kautilyanism and Machiavellenism, surprisingly are alive even today. In fact, it is readily
visible in many books that have made their way to the top of the best-seller list in recent
years. The Kind of get to the top at all costs" books that outline similar self-centred strategies
for ' achieving power and success. If the popularity of such books is any indication, it appears
that Machiavelli's approach is alive and well in contemporary society
Negative consequences of political behaviour include demotions and loss of jobs for losers"
political process, a misuse of resources, and creation of an ineffective organisational culture.
The effect on culture may be among the most undesirable consequences of continual political
behaviour. Organisational politics may arouse anxieties that cause withdraw employees to
withdrawal emotionally from the organisation. The withdrawal, in turn, makes creating an
organisational culture characterised by high performance and high commitment unlikely.
Politics can also create the impression of evading the critical issues. Instead of following a
coherent strategy, decisions seen perpetually compromised out of recognition. The
organisation seems to drift along. Problems which should be dealt with are ignored until they
become crises.
Political behaviour, obviously can meet appropriate and legitimate individual and
organisational needs or it can result in negative outcomes. In any event, managers and
employees must understand political behaviour because it will definitely occur. Eliminating
political behaviour may be impossible - it can only be managed.
While all organisations are potentially political arenas, political activity may vary in intensity
from organisation-to-organisation and from situation-to-situation. Political activity is least
pronounced in organisations where power is highly centralised. Presumably this is because
such organisations minimise the amount of discretion available to employees. Political
activity may also be less pronounced where the environment is fairly stable. Conversely,
insecurity can increase the propensity to managerial politicking. Poor performance is a prime
source of insecurity.
It is also important to remember that political machinations and manoeuvres can fail. Politics
can enable managers to rise but can also prompt their downfall as skills become obsolete,
energy gets sapped, age advances and attitudes and outlooks unfashionable, and as others vie
for position. Beneath the surface, things are not always what they seem. Many a manager has
discovered to their cost that their apparently loyal supporters are secret and determined
enemies. No one is absolutely essential.
ETHICS OF POWER AND POLITICS
No discussion on power and politics is complete without a reference to the related ethical
issues. We can begin this task by distinguishing between the political and the non-political
use of power. Power is non-political in its use when it remains within the boundaries of
formal
Authority, organisation policies and procedures and job descriptions, and when it is directed
towards ends sanctioned by the organisation. When the use of power moves outside the realm
of authority, policies, procedures and job descriptions, or is directed towards ends not
sanctioned by the organization, that use of power is political.
Ethical issues emerge when the use of power stretches into the realm of political benaviour.It
is in this Context that a manager must stop and seriouslv consider the ethical issues involved
in every action. The attitude that "ends justify the means" is not desirable.
A person's behavior must satisfy three criteria if it were to be ethical. These are
Criterion of utiltarian outcomes: The behaviour results in optimisation of satistaction
of people inside and outside the organisation. that is, it produces greatest good for the
greatest number of people.
Criterion of individual rights: The behaviour respects the right of all affected parties;
that is, it respects basic human rights of free consent, free speech, freedom of
conscience, privacy and due process.
 Criterion of distributive justice: The behaviour respects the rules of justice, that is, it
treats people equitably and fairly as opposed to arbitrarily.

It may be stated that a behaviour may fail to satisfy the three criteria but can still be
considered ethical in a given situation. This special case must satisfy the criterion of
overwhelming factors, a criterion that justifies a failure to satisfy one or more of the prior
criteria of ethical political behaviour. This justification, however, must be based on truly
overwhelming factors in which the special nature of the situation results in:
conflicts among criteria (e.g., a behaviour results in some good and some bad being
done),
conflicts within criteria (e.g., a behaviour uses questionable means to achieve a
positive end), and/or
incapacity to employ the criteria (e.g., a person's behaviour is based on inaccurate or
incomplete information).

Use of these four criteria can add vigour to the analysis of the ethics of political behaviour in
organisations. All managers use power and politics to get their work done. Thus, every
manager bears a responsibility to do so in an ethical and socially responsible fashion.
 MODULE-5

Organizational Culture & Creativity

5. Organizational Culture & Creativity

5.1 Meaning & Definition
5.2 Cultural Dimensions
5.2.1. Levels of Culture - (National Culture, Business Culture, Occupational and
Organizational Culture),
5.2.2. Mechanistic & Organic Cultures,
5.2.3. Authoritarian & Participative Cultures,
5.2.4. Dominant & Sub Culture,
5.2.5. Strong, Weak & Unhealthy Culture
5.3. Culture Artifact’s
5.3.1. Stories
5.3.2. Rituals
5.3.3. Ceremonies
5.3.4. Language
5.3.5. Structures and symbols
5.3.6. Statements of principles
5.4. Sustaining the culture
5.5. Effects of Culture
5.6. Changing Organizational Culture
5.7. Creativity in Organizations – Nature, Process
5.8. Methods of enhancing Creativity

1
Course Outcomes: Describe the role of culture in determining effective Organizational
perceptions and outcomes.

Learning Objective:

1. Explain the meaning and definition of organizational culture

2. Identify and describe the various dimensions of organizational culture
3. Identify and describe the various levels of organizational culture
4. Describing the Changing Organizational Culture
5. Identify the Methods of enhancing Creativity

2
5.1. Meaning & Definition of Organizational Culture

It is an organizational climate where all members perceive the same things as good or bad, that
is, they share common values. The members can have different values as individuals, as groups
and as members of society. The organisations also have values that work for the benefit of all
those who are in contact with them, like customers, suppliers, creditors etc.

When individuals and organisations share values and direct their efforts towards a common goal,
that is, accomplishment of organisational objectives and through it, their personal objectives,
they are said to be working in a system of shared values and beliefs. This is known as corporate
culture.

Culture means refinement or civilization. Organisation culture defines how refined or civilized
an organisation is. It is a set of values that defines what the organisation stands for, how it works
and what things or activities it considers important. It provides foundation to organisation’s
internal environment and shapes the behaviour of managers.

Organisation culture differentiates one organisation from the other. White shirt and black
trousers signify one organisation while sky blue shirts and navy blue trousers signify another
organisation. A cap with uniform can indicate production department and a tie can indicate sales
department in the same organisation.

When we enter a Government office, we can make out the difference than when we enter a
private office. What highlights this image of an organisation? It is the culture of an organisation.
Organisation culture provides a ‘feel’ about the organisation to those who deal with it. It
represents common perception held by its members.

People at different levels in different departments hold common opinion about the organisation.
They define organisation culture in similar terms. It is a force that determines effectiveness and
long-term success of the organisation.

Organisation culture is personality of the organisation that differentiates it from other

organisations. “Organisation culture refers to a system of shared meaning held by members that

3
distinguishes the organisation from other organisations.” What makes Airtel different from
Vodafone and Reliance though all of them deal in the same product? It is the organisation culture
of these companies.

Companies with strong culture (Proctor and Gamble, Reliance Industries) are more effective than
those with weak culture. Strong cultures have greater impact on motivation, behaviour and
productivity. There is high degree of agreement amongst members about the organisational
purpose, goals, norms, values and activities. This increases their loyalty and commitment
towards the organisation and reduces the rate of labour turnover and absenteeism.

Definition of organizational Culture

According to E.H. Schein “A model of shared, fundamental assumptions that a given group has
created by solving problems of adaptation to the environment and internal integration the pattern
can be considered effective. It is taught to new members of the organisation as a correct way of
solving problems”

According to E.B. Taylor defines culture as “that complex whole which includes knowledge,
belief, art, morals, law, custom, and other capabilities and habits acquired by man as a member
of society.”

According to R. Deshapande& R. Parasurman “Unwritten, often subconsciously perceived

principles that fill the gap between what is unwritten and what actually happens in an
organisation”

According to J. Van Maanen Culture refers to the knowledge that is passed on to the members of
a group in order to share it; such knowledge is used to inform, embed, shape and account for
routine and non-routine activities of the members of a culture. Culture is expressed (or
constituted) only by the actions or words of its members and must be interpreted by the
employees of the organisation. Culture as such is not visible; it becomes visible only through its
representation.

4
CHARACTERISTICS OF CULTURE:

1. Individual Initiative: The degree of responsibility, freedom, and independence that

individuals have.
2. Risk Tolerance: The degree to which employees are encouraged to be aggressive,
innovative, and risk-seeking.
3. Directions: The degree to which the organisation creates clear objective and performance
expectations.
4. Integration: The degree to which units within the organisation are encouraged to operate
expectations.
5. Management Support: the degree to which managers provide clear communication,
assistance and support to their subordinates.
6. Control: The number of rules and regulations, and the amount of direct supervision that
is used to oversee and control employee behaviour.

5.2. Cultural Dimensions:

5.2.1. Levels of culture: Three levels of culture may be distinguished. These include national
culture, business culture and occupational and organizational cultures. All these levels influence
the effectiveness of management.

(i) National Culture: Organisational culture is always influenced by the culture of the land,
irrespective of the origin of the company. Or in other words, if there is a clash between the
organisational culture and the national culture, the organisational culture generally prevails. For
example, any company operating in India, whether Indian or foreign, observes the local culture.

They declare the same holidays, celebrate the same festivals and organize the same functions and
cultural activities as reflected by the Indian ethos. But research also indicates that though
organisational culture is important in understanding the behaviour of people at work, national
culture is even more so.

(ii) Business Culture: Business or Corporate culture refers to the beliefs and behaviors that
determine how a company's employees and management interact and handle

5
outside business transactions. Often, corporate culture is implied, not expressly defined, and
develops organically over time from the cumulative traits of the people the company hires

(iii) Occupational and Organisational Culture: Occupational culture is a broader construct. It

is believed to be the result of similar occupational backgrounds and experiences of different
groups of organizational members. In particular, occupational culture (or subculture) develops
through social interaction, shared experience, common training and affiliation, mutual support,
associated values and norms, and similar personal characteristics of members of a particular
occupational group. Like organizational culture, occupational culture develops distinct jargon
and shapes perceptions of reality by developing classification systems to describe experiences
and concepts. More generally, all cultures operate from cognitive models to filter expectations –
a kind of meaning-making. Schein identified three broad occupational cultures in organizations:

The “operators” occupational culture that applies to line managers and workers whomake and
deliver the products and services that fulfill the organization’s basic mission, The “engineers”
occupational culture that applies to technocrats and core designersin any functional group (e.g.,
accountants, software programmers, market researchers,etc.), andThe “executives” culture that
applies to top managers and executives.

Organisational culture is the collective programming of the mind which distinguishes the
members of one organization from another. More generally, organizational culture can be
defined in terms of values shared by members of an organization (or its subunit)that manifest
themselves in the practices of that organization or sub-unit. It was found that organization culture
is a function of size, technology, structure and functional area. It is suggested that organizational
culture is affected by the nature of the industry the organization operates in. Other factors that
influence organizational culture include national culture, societal culture and organizational
environments and goals.

5.2.2. Mechanistic and Organic Cultures:

In the mechanistic type of culture, the values of bureaucracy and feudalism are exhibited. People
restrict their careers to their own specializations only and organisational work is concerned as a
system of narrow specialism. It comprises of a traditional form of organisation where the

6
authority flows from the top level of the organisation to the lower levels. Communication
channels are also well defined and prescribed.

The main limitation of this method is that though the people are loyal to their departments but
interdepartmental rivalry and animosity is always there. This sort of culture resists any type of
change as well as innovations.

Organic culture is just the contrast of mechanistic culture. There are no prescribed
communication channels, departmental boundaries, hierarchies of authority or formal rules and
regulations. In this form of culture more stress is on flexibility, consultation, change and
innovation.

There is free flow of communication-both formal and informal. Much emphasis is laid on team
work and task accomplishment. There are no rigid departmental boundaries and the whole staff
understands the problems, threats and opportunities faced by the organisation. The whole staff as
a team is willing and prepared to take appropriate roles to solve the problems.

5.2.3. Authoritarian and Participative Cultures:

In authoritarian culture, power is centralized in the leader and all the subordinates are expected to
obey the orders strictly. Discipline is stressed and any disobedience of orders is severely
punished to set an example for the others. This culture is based on the basic assumption that the
leader knows what is good for the organisation and he or she always acts in the organisational
interests. This type of culture discourages professionalization because professionals consider
themselves as equals.

The participative culture is based on the assumption that when all the people working in the
organisation participate in the decision making, they are likely to be more committed to the
decisions rather than to those decisions which are imposed on them by one authoritarian leader.
Group problem solving always leads to better decisions because several minds working together
are considered better than one mind working alone. If we discuss something new, points and
information emerge, which help in the decision making.

7
5.2.4. Dominant Culture and Subcultures:

A dominant culture is a set of core values shared by a majority of the organization’s members.
When we talk about organisational culture, we generally, mean dominant culture only. The
dominant culture is a macro view, that helps guide the day to day, behaviour of employees.

A sub-culture is a set of values shared by a small minority of organization’s members. Sub-

cultures arise as a result of problems or experiences that are shared by members of a department
or unit of the organisation. In the subculture, the core values of the dominant culture are retained
but modified to reflect the individuals unit’s distinct situation. For example, the marketing
department may have its own sub-culture; the purchase department may have its own sub-culture
depending upon the additional values which are unique to these departments only.

It is necessary for every organisation to have a dominant culture because if there are only
numerous sub-cultures, the value of organisational culture as an independent variable will lessen
and the concept of Shared Behaviour will no longer be effective. Moreover, if sub-cultures come
into conflict with the dominant culture, these will weaken and undermine the organisation. But,
many successful firms have found that most sub-cultures help the members of a particular group
deal with the specific day to day problems with which they are confronted. These members may
also support many, if not all, of the core values of the dominant culture.

5.2.5. Strong, Weak & Unhealthy Culture

Organisational culture can be strong or weak cultures.

A strong culture will have the following features:

(i) Strong values and strong leadership.

(ii) A strong culture is always widely shared. Sharedness refers to the degree to which the
organisational members have the same core values.

(iii) A strong culture is intensely held. Intensity refers to the degree of commitment of the
organisation’s members to the core values.

8
A strong culture will have a great influence on the behaviour of its members because high degree
of sharedness and intensity create an internal climate of high behavioural control. A weak culture
is just the reverse of strong culture in every aspect.

The benefits of strong culture are reduced turnover and positive employee attitude. A strong
culture demonstrates high agreement among members about what the organisation stands for.
Such unanimity of purpose builds cohesiveness, loyalty and organisational commitment. As a
result turnover is low and employees have a positive attitude towards the organisation the
opposite will happen if the culture is weak. The limitations of strong culture are that it will lead
to “group think”, collective blind spots and resistance to change and innovation.

Weak Organisational culture: A weak organizational culture refers to values and beliefs not
strongly and widely shared within the Organization. This implies that individual members of the
Organizational rely more on personal principles, norms and values. Organizations with a weak
Organizational culture engage little in culture specific investments, and such cultures are more
volatile. To guide the behaviour of its members, Organizations with weak Organizational
cultures rely more on rules and regulations than on a shared understanding of values and beliefs
hence there is a strict emphasis of rules and regulations with which members’ behaviour should
be aligned.

Unhealthy Culture: In an unhealthy organisational culture, managers assume that employees

will flow in and out all the time, and that most employees are replaceable or interchangeable. 2.
The leaders are the only ones who have offices. Also, a hierarchical culture has a negative impact
on innovation.

5.3. Culture Artifact’s

Artifacts include any tangible, evident or verbally identifiable elements in an organization. These
include the architecture, beautification of workplace, careful design, layout, fitting and
maintenance, built-in space for movement (space, sound, and acoustics), functionality, attractive
visuals, elegance, furniture etc. Artifacts include dress codes; explicit dress codes speak a lot
about workplace culture. It differs as per the nature of the workplace; it is the starting point of

9
defining and determining a dress code. Wearing I-Card and clean dress, well-groomed
employees speak a lot about organizations.
The employees are organization’s first brand ambassadors. Law firms are different from IT
firms, hospitals are different from hospitality, manufacturing is different from retail and back
office work is different from client-facing work. Dress codes, languages, selection of courteous
language, office jokes, all exemplify organizational artifacts. Artifacts are the visible elements in
a culture and they make the first impression on outsiders. Organisational culture having emerged,
manifests itself through stories, rituals, ceremonies, language, symbols and statements of
principles.
5.3.1. Stories: Stories about past corporate incidents serve as powerful social prescriptions of the
way things should (or should not) be done. As they are told and retold, stories give meaning and
identity to the organizational members and are especially helpful in orienting new employees.
The strength of the stories lies in the fact that the listeners are left to draw their own conclusions.
The following themes generally appear in stories across different types of organization:
Stories about the CEO: The stories that may reflect whether the CEO is “human” or how he or
she react to mistakes
Stories about getting fired: Events leading to employee firings are recounted.
Stories about how the company deals with the employees who have to relocate. These stories
relate to the company’s action towards employees who have to move whether the company is
sympathetic or not.
Stories about how the company deals with crisis situations, as revealed by the experience of Brij
Mohan Khaitan, the tea baron. Crisis is no new to him. He survived a bomb attack in London,
riots of pre-independence Calcutta and the Naxalite movement. But the crisis from ULFA and
Bodo militants in Assam was too much for Khaitan. On March 18, 1992, one of his executives
Subhir Roy and his driver were abducted by BSF-another militant organization in Assam. Roy
and his driver were released after 20 days of captivity. Khaitan apparently bought peace from
militants. Today, the gardens are guarded night and day by Khaitan’s private army. Two
thousand armed guards, forty per garden, patrol its perimeter constantly. No manager is allowed
to go outside the garden without some protection. He built a school in Assam in investing Rs 22
crores to provide good education to the children. His protective attitude towards his executives
has earned him their unflinching loyalty.

10
Stories about whether lower level employees can rise to the top. Often, these stories describe a
person who started out to the bottom and eventually became the CEO.
To be effective as cultural tools, stories must be credible. One cannot tell stories about flat
structures and then have parking space reserved for managers. Stories not backed by reality, can
lead to cynic and mistrust. Credible stories prescribe norms for employee behavior.
5.3.2. Rituals: Rituals are everyday organisational practices that are repeated routinely. They
help dramatise the organizational culture. They also help achieve desired behavior from
employees and build commonality of culture. Examples include dress of organizational
members, how visitors are greeted, how fellow employees are greeted, how often senior
executives visit subordinates, how much time employees take for lunch and the like.
5.3.3. Ceremonies: Ceremonies are more formal artifacts than rituals. Elaborate sets of activities
that are enacted time and again on important occasions are known as organizational ceremonies.
These occasions provide opportunities to reward and recognize employees whose behavior is
congruent with the values of the company. Ceremonies send the message that individuals who
both espouse and exhibit corporate values are heroes to be admired. Example of ceremonies
includes celebrating launch of a new product.
5.3.4. Language: The language of the workplace speaks highly about the organizational’s
culture. Many organizational and units with organisations use language as a way to identify
members of a culture or sub-culture. By learning this language, members attest to their
acceptance of the culture and in so doing, help preserve it.
Organisations, over time often develop unique terms too describe equipment, offices, key
personnel, suppliers, customers or products that relate to its business. New employees are
frequently overwhelmed with acronyms and jargon that, after six months on the job, have
become fully part of their language. Once assimilated, this terminology acts as a common
denominator that unites members of a given culture or sub-culture.
5.3.5. Structure and Symbols: The size, shape, location and age of buildings might reveal
organisation’s culture. British Airways has changed its corporate culture by changing its
headquarters building. The old multi-story headquarters near London’s Heathrow Airport
reinforced hierarchical and bureaucratic values that the airline wanted to cast off. The new
headquarters is designed with a central village square and work units spreading out of it. Inside a

11
building, there is a treasure trove of physical artifacts. Desks, chairs, cafeteria food and wall
hangings, dress attire are just a few things that might convey cultural meaning.
5.3.6. Statement of Principles: Yet another artifact of corporate culture is the direct statement of
principles. Some organisations have explicitly written principles for all to see. Some other
companies make explicit the moral aspects of their culture by publishing codes of ethics- specific
statements of a company’s ethical values. Statement of the type enables the newly hired
employees to understand the culture of their organization.
Tatas have a comprehensive code of conduct, popularly known as TCoC, the code was formally
committed to paper in 1998. The TCoC expresses the company’s values in a straightforward way
that makes crystal clear what is expected of anyone associated with the company. In addition to
defining the company’s value system, the code lays out what honourable behavior is and
specifies that employees, partners, contractors, consultants and suppliers be expected to adhere to
those standards.
The TCoC is a dynamics document. Though it has remained unaltered at its core. The code has
been modified down the years to keep it in step with changing regulatory norms in different parts
of the world that Tata companies have operations. These modifications reforced the code, and
enabled it to reflect the diverse business, cultural and other factors that have a bearing on the
health of the Tata brand.

Case Study of Zappos.com

Zappos.com is an online shoe and clothing shop currently based in Las Vegas, Nevada. In July
2009, the company announced it would be acquired by Amazon.com in an all-stock deal worth
about $1.2 billion. Since its founding in 1999, it has become one of the world’s largest online
shoe stores. Zappos has become almost as well known for its culture as it is for the shoes that it
sells online. How does Zappos culture look like? It believes in delivering an experience of
‘WOW’ through service. The company believes in embracing change constantly. It believes in
creating fun and weirdness among the employees. Weirdness is necessary for creating
innovation. It encourages its employees to be adventurous, creative and open-minded and pursue
learning. The organization believes in building honest relationship with its employees with
transparent communication. In true sense Zappos behaves like a close-knit family.

12
When it comes to hiring employees, it starts with a cultural fit interview, which carries half the
weight of hiring the candidate. New employees are offered $2,000 to quit after the first week of
training if they decide the job isn’t for them. Ten core values of the company are instilled in
every team member. Employee raises come from workers who pass skills tests and exhibit
increased capability, not from office politics. Portions of the budget are dedicated to employee
team building and culture promotion. The organization passes on great benefits and a workplace
that is fun and dedicated to making customers happy all fit in with the Zappos approach to
company culture, where one gets the company culture right, great customer service and a great
brand will happen on its own. Zappos has established what the company culture is, and fitting
into that culture is the most important thing managers look before hiring.

5.4. Sustaining Organizational Culture:

There are strategies which organizations employ to sustain their cultures. Such approaches
include selecting and socializing employees, actions of founders and leaders. Culturally
consistent rewards, managing the cultural network and maintaining stable work force

Selecting and Socializing Employees- The main purpose of hiring process is to hire the right
people for right jobs. When, for a given job, two or more candidates, with identical skills and
abilities are available, final selection is influenced by how well a candidate fits into the
organization.by identifying candidates who can jell with the organizational culture, selection
helps sustain culture considerably.

Actions of Leaders and Founders- We have already stated the role of leaders in creating
organisational culture. We emphasise that the founders and leaders play a significant role in
sustaining organisational culture. Founders are visionaries whose energetic style provides a
powerful role model for others to follow. The founder's cultural imprint often remains with the
organisation for decades. For example, the culture at Microsoft calls for working exceptionally
long hours, because that is what the co-founder Bill Gates has always done.
In spite of the founder's effect, subsequent leaders can break the organisation away from the
founder's values if they apply the transformational leadership concept. Transformation leaders
strengthen organisational culture by communicating and enacting their vision of the future.

13
Cultural values are pertinently reinforced when leaders behave in ways that are consistent with
the vision.

Culturally Consistent Rewards- Rewards systems strengthen corporate culture when they
are consistent with cultural values. Aggressive cultures might offer more performance-based
individual incentives, whereas paternalistic cultures would more likely offer employee assistance
programs, medical insurance and other benefits that support employee well-being.

Managing the cultural network- Organizational culture is learned, so an effective network of

cultural transmission is necessary to strengthen the firm in underlying values and beliefs. The
cultural network exists through the organizational grapevine.

Maintaining a stable workforce- An organization’s culture is embedded in the minds of its

employees. Starting and stopping new things all the time will never lead to movement and it can
cause employees to distrust management.

5.5. Effects of Culture

Cultural effects may be both functional as well as dysfunctional. It is stated that culture leads to
groupthink, clannishness and anti-mergers and acquisitions. The culture makes an organization a
clan. The clan form in an industry possesses a few potentially disabling weakness. A clan always
tends to develop xenophobia, a fear of outsiders. Another problem from well-knit culture relates
to the management of diversity. Strong cultures put considerable pressure on employees to
conform. But modern organisations are known for diversity of workforce. Workforce diversiy is
being accepted and even encouraged. Obviously, there develops conflict between the need for
conformity and the advantage of having employees with diverse behaviours and strengths.

Culture acts as a barrier to merger and acquisitions. Historically, financial matters were alone
considered to decide which company should acquire which company or which company would
merge with which firm. In the recent years, cultural compatibility has become the primary
concern. While a favourable financial statement or product-line may be the initial attraction of an

14
acquisition company, whether the acquisition actually works seems to have more to do with how
well the cultures of the two organisations match each other.

Culture tends to lead to groupthink. It refers to a condition in which all members of a group tend
to think alike. Members share a strong motivation to achieve consensus. In groupthink, members
tend to limit their list of possible solutions at a few and spend less time in considering alternative
solutions. They follow the leaders.

On the positive side, culture in an organization serves the following purpose:

Effective control

Promotion of innovation

Strategy formulation and implementation

Strong commitment from employees

Performance and satisfaction

Effective control- Control serves as a control mechanism that shapes behaviours of employees.
As strong culture seeps through the organization, people register do’s and don’ts. When
employees do not act in accordance with the beliefs and values of the culture, managers and
colleagues are likely to intervene and initiate corrective actions.

Promotion of innovation- Innovation and creativity are emerging issues in the domain of
organizational culture.

Strategy formulation and implementation – Organisational culture has considerable influence

on strategy formulation and implementation, particularly on the later. Culture provides inputs to
the company to adopt a particular strategy. Culture energies people in the company to do their
jobs in a strategy-supportive manner and help execute strategies. A culture, where frugality and
thrift are values strongly shared by organizational members, is condusive to successful execution
of a low-cost leadership strategy. Similarly, a culture where creativity, embracing change, and
challenging the status quo are pervasive themes is very conducive to successful implementation
of a product innovation and technological leadership strategy. A culture built around such

15
principles as listening to customers, encouraging employees to take pride in their work, and
giving employees as high degree of decision making responsibility, is very conducive to
successful execution of a strategy of delivering superior customer service.

Strong commitment from employees- Culture provides a sense of identity to members and
increases their commitment to the organization. When employees internalize the values of the
company, they find their work intrinsically rewarding and identify with their fellow workers.
Motivation is enhanced, and morale boosts.

Commitment is said to go through three phases- compliance, identification and internalization.

With regard to compliance, people conform in order to obtain same material benefit. When they
reach the identification stage, the demands of culture are accepted in order to maintain good
relationships with colleagues. In the final phase- internalization-people find the adoption of the
cultural values of the organization produces intrinsic satisfaction because these values are in line
with their personal values. In many ways, this is an ideal state as far as the acceptance of
organizational values is concerned and if widespread is indicative of a strong culture.

Performance and satisfaction – Culture has significant impact on performance. Comparative

studies of Japanese and American management methods suggest that the relative success of
Japanese companies in the 1980s could be partly explained by their strong organization cultures
emphasizing employee participation, open communication, security and equality.

Culture has a performance-enhancement quality for at least four reasons. First, strategy
implementation is made easy through culture. Second, strong culture is characterized by goal
alignment; that is all employees share common goal. Third, strong culture creates a high level of
motivation because of the values shared by the members. Finally, strong culture provides control
mechanism without the oppressive effect of bureaucracy.

That culture contributes to performances needs a rider. Under stable conditions, culture can
contribute to enhanced organizational performance. However, if the environment is changing,
culture can become a liability.

16
There is correlation between organizational culture and employee satisfaction. But individual
need of employees may moderate the relationship between culture and satisfaction. In general,
satisfaction will be the highest when there is congruence between individual needs and culture.
For instance, an organization whose culture would be characterized as low in structure, having
loose supervision, and rewarding employees for higher achievement is more likely to have more
satisfied employees if those employees have a high achievement need and prefer autonomy.
Thus, job satisfaction often varies according to the employees’ perception of the culture.

5.6. Changing Organisational Culture

Culture of an organisation needs to be changed, particularly when the company's culture is weak,
unhealthy, or when it acts as an obstacle in implementing a new strategy. Culture change should
be preceded by diagnosing the existing values and beliefs of the organisation. Organisational
behaviour experts have developed a number of useful approaches for diagnosing organisational
culture. These fall into three different, yet complementary approaches the behavioural approach,
the competing values approach, and the deep assumptions approach.
The behavioural approach: This approach emphasises the surface level of culture – the pattern
of behaviours that employees’ exhibit. This approach provides specific descriptions about how
tasks are performed and how interpersonal relations are managed in organisations.
The competing values approach: This approach seeks to assess an organisation's culture in
terms of how it resolves a set of value dilemmas. The approach suggests that an organizational
culture can be understood in terms of two important ‘Value Pairs’, each pair consisting of
contradictory values placed at opposite ends of a continuum, as shown Figure below. The two
value pairs are: (i) internal focus and integration versus external focus and differentiation, and
(ii) flexibility and discretion versus stability and control. Organisations continually struggle to
satisfy the conflicting demands placed on them by these competing values. For example, when
faced with the competing values of internal versus external focus, companies must choose
between attending to the integration problems of internal operations and the competitive issues in
the external environment. Too much emphasis on the environment can result in neglect of
internal efficiencies. Conversely, too much attention to the internal aspects of organisation can
result in missing important changes in the competitive environment.

17
The competing values approach provides indications of where an organisation's existing values
fall along each of the dimensions and quadrants shown in Figure below: clan culture, ad-hocracy
culture, hierarchical culture, and market culture. For example, if an organisation's values are
focused on internal integration issues and emphasise innovation and flexibility, it exhibits a clan
culture. On the other hand, a market culture characterises values that are externally focused and
emphasise stability and control.

Flexibility and
Dissection

CLAN AD-HOCRACY
Internal Focus and

Internal Focus and

Differentiation
Integration

HIERARCHY MARKET

Stability and control

The deep assumptions approach: This approach focuses on the deepest levels of organisational
culture – the generally unexamined, but tacit and shared assumptions that guide members'
behaviour and which have a powerful impact on employee performance. Diagnosing culture
from this perspective typically begins with the most tangible level of awareness and then works
down to the deep assumption.
5.6.2 The method operates on the following lines:
An OB expert brings a group of people for a culture workshop, for example, a senior
management team or a cross-section of managers, old and new members, labour leaders, and
staff. The group first brainstorms a range of artifacts, such as behaviours, symbols, language, and

18
physical space arrangements. From this list, the values and norms that would produce such
artifacts are deduced. In addition, the values espoused in formal planning documents are listed,
Finally, the group attempts to identify the assumptions that would explain the constellation of
values, norms, and artifacts.

5.6.3 Difficulties in Changing: Having understood the existing culture, the OB expert needs to
take steps to change the norms, values, and beliefs. Before doing so, it is advisable to be aware of
the difficulties in changing the organisational culture.
It may be stated that those advocating culture change generally focus on more superficial
elements, such as norms and artifacts. These elements are easier to change than the deeper
elements of values and basic assumptions. We focus on the difficulties faced in changing the
deeper elements of culture.
Deeper elements of organisational culture represent assumptions about organisational life which
members do not question and have difficulty in envisioning anything else. Besides, members do
not want to change their cultural assumptions. The culture provides a strong defense against
external uncertainties and threats. It represents past solutions to difficult problems. Members also
have vested interests in maintaining the status quo. They may have developed personal stakes,
pride, and power in the culture and may strongly resist attempts to change. Further, cultures that
provide firms with a competitive advantage may be difficult to replicate, thus making it difficult
for less successful firms to change their cultures to approximate the more successful ones.
Age-old practices of doing business seldom die. Business culture of a certain community in India
is characterised by paying and receiving graft, manipulation of political and bureaucratic
authority, and efficient tax dodges. It is extremely difficult to change such a culture.
Finally, any change in culture demands change in the configuration of organizational members,
the property rights system, and organisational structure. To change its culture, an organisation
needs to redesign its structure, and revive the property rights it uses to motivate and reward
employees. The organisation might also need to change its people, especially its top management
team. All these are easier said than done.

Notwithstanding the difficulties, culture change becomes necessary in the following

circumstances:

19
• Culture of an organisation does not fit a changing environment,
• If the industry is extremely competitive and changes rapidly,
• If the company is mediocre or worse,
• If the organisation is about to become a very large one, or
• If the company is smaller and growing rapidly.
• Change in the composition of workforce. With the entry of new hires, there arises the need for
new culture as the new hires are different from those who are already in.
• The organisation has merged or acquired a new company necessitating a change in the culture.
• Internet has profound impact on organisations. Among others, internet demands fast pace,
agility and receptivity. Traditional brick and mortar organisations do not match the requirements,
nor can internet be ignored. Change is inevitable.
• Change of culture becomes necessary for a strategic reason also. For example, the organisation
has a strategy to achieve rapid growth. A new culture needs to be evolved to suit the strategy.

Organisations facing these conditions need to change their cultures to adapt to the situations or to
operate at higher levels of effectiveness. They may have to attempt or supplement attempts at
cultural change with other approaches, such as managing around the existing culture and
modifying strategy.

5.6.4 Guidelines for Changing: The following practical advice can serve as guidelines for
cultural change:
(i) Formulate a clear strategic vision. Effective cultural change should start with a clear vision
of the organisation's new strategy and of the shared values and behaviours required to make it
work. This vision provides the purpose and direction for change in culture. It serves as a
yardstick for defining the organisation's existing culture and for deciding whether proposed
changes are consistent with the core values of the organisation
(ii) Display top management commitment. Cultural change must be managed from the top of
the organisation. Chief executives and other responsible people should be strongly committed to
the new values and need to create constant pressures for change. They must have the staying
power to see the changes through.

20
(iii) Model cultural change at the highest levels, Senior executives should communicate the
new culture through their own actions. Their behaviours need to reflect the kinds of values and
actions being sought.
(iv) Restructure the organisation to support the new culture. Cultural change needs supporting
modifications in organisational structure, human resource systems, control mechanisms, and
leadership styles. These changes can help orient people's behaviours to the new culture.
(v) Select and socialise newcomers and terminate deviants. Changing organizational
membership is necessary to change corporate culture. People need to be selected and terminated
in terms of their consequence with the new culture. This is especially important in key leadership
positions, where people's actions can significantly promote or hinder new values, beliefs, and
actions.
(vi) Develop ethical and legal sensitivity. Cultural change can ignite tensions between
organisational and individual interests, resulting in ethical and legal problems for individual
members. Promoting performers, demoting laggards, and terminating deviants lead to ethical and
legal problems. Guidelines for minimizing such tensions would be: setting realistic values for
cultural change and not promising what the organization cannot deliver; providing mechanisms
for member dissent and diversity, such as internal review procedures, and educating managers
about the legal and ethical pitfalls inherent in cultural change and helping them develop
guidelines for resolving such issues.

5.7. Creativity in Organisation- Nature and Process

Creativity is nothing but the process of creating something unique and new. Creativity indeed
plays a crucial role in organizations at all levels. Following same old techniques might not yield
results every time. Creativity is reaching to innovative solutions, new ideas, and unique concepts
through brainstorming, discussions and healthy communication among employees.
Organizational creativity is ideas or innovations attributed to a group of people that all work for
the same organization. That could be a team developing, creating and marketing a new product.
Creativity is the ability to link or combine ideas in novel ways, and their unique alternatives have
to be considered useful to others. It is also known as divergent or lateral thinking. Lateral
thinking moves away from the linear approach that’s advocated in rational decision making.

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Some researchers feel that employee and manager creativity is the hallmark of an organization’s
success—that solving old organizational issues in new ways creates organizational effectiveness.

Nature of Creativity

Creativity refers to the process by which novel but situationally appropriate outcomes are
brought about. The essence of creativity is the element of freshness, originality, and novelty that
is also appropriate to the context. If a manager gives dictation standing on his head, there is
novelty but the act is hardly appropriate. In other words to call anything creative, the act must be
unique and appropriate to the context. The social and technological changes that organisations
face require creative decisions. Managers of the future need to develop special competencies to
deal with the turbulence of change, and one of these important competencies is the ability to
promote creativity in organisations.
Jugaad is the vernacularised word for innovation. Jugaad may then be understood as an
improvised solution born from ingenuity and cleverness. It is a unique way of thinking and
acting in response to challenges.
It is not that creativity is needed now more than ever before. In fact, most of the inventions we
are enjoying today were discovered hundreds or even thousands of years ago. But business being
so complex and competitive now, a firm gains competitive edge if it is creative.

FOR EXAMPLE: ANCIENT CREATIVITY AND MODERN LIFE

As modern humans, we pride ourselves on our creativity and inventiveness and how they have
given us a wondrous standard of living. But much of what we include in our standard of living
originated hundreds or even thousands of years back. Tea - the cup that cheer came from China,
as did gunpowder, paper, rockets, kites, printing, silk, and porcelain. India supplied sugar, cotton,
steel, and umbrellas. The clock was invented in medieval Europe enameling on metal and the
mirror in the Mediterranean basin; the spoon, bathtub and the toilet seat in Rome. Soap was
invented by the Gauls in France, the towel in Turkey. The chair was invented in the Near East.
Buttons were invented during the Stone Age in Europe, shown in ancient Egypt, and their
polishing in Greece, Italy provided the first forks. As far as beverages are concerned, coffee was
an Arabic invention from an Ethiopian plant, beer came from the Near East, whisky from
medieval Europe, and milk, or rather milking, was a Turkish invention. Amongst fruit, the

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orange was first grown in the Mediterranean basin, the cantaloupe in Persia, and grapes in
Turkey. Wheat, bread, and butter originated in the Near East, while chicken and pig were first
domesticated in South-East Asia for food. The cigarette was invented in Mexico and the Cigar in
Brazil. Coins were invented in ancient Lydia. Even the English alphabet was not invented in
England but in Phoenicia (the modern Lebanon).
(Source: Pradip N. Khandwalla, Corporate Creativity, Tata McGraw-Hill, 2003, p. 34.)

Process of Creativity in Organisation

Four stages have emerged in the creative thinking process.
1. Preparation stage – conscious attempt to understand and absorb information.
2. Incubation stage – conscious mind is focused elsewhere but below the level of
consciousness the ideas are being continually combined.
3. Illumination – solution appears suddenly – flash of insight.
4. Verification – solution is tested in a conscious and deliberate way.

Stage 1: Preparation

The creative process begins with preparation: gathering information and materials, identifying
sources of inspiration, and acquiring knowledge about the project or problem at hand. This is
often an internal process (thinking deeply to generate and engage with ideas) as well as an
external one (going out into the world to gather the necessary data, resources, materials, and
expertise).

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Stage 2: Incubation
Incubation is a process of reflective thought and is often conducted subconsciously. During
incubation, the individual engages in other pursuits while the mind considers the problem and
works on it. Incubation plays a powerful role in dissolving previously held notions about a
problem. It does not involve forgetting about the problem or issue; rather it involves putting the
problem on the back burner. The problem is still simmering in one's mind, but it is not at the
forefront of his or her attention.
Along with dissolving fixed notions of the problem, incubation assists in divergent thinking.
Divergent thinking involves reframing the problem in a unique way and generating different
approaches to the issue.

Stage3: Illumination Stage

The illumination or insight stage is the shortest and remains a key stage in the creative process,
because it is at this stage that the idea takes shape. Individuals experience insight at some point
during the incubation stage. Insight refers to the experience of suddenly becoming aware of a
unique idea. These flashes of inspiration do not follow any particular schedule; they might come
at any time of the day or night. They are also fleeting and can be lost quickly if not documented.
With this in mind, many people carry small voice recorders that allow them to capture their ideas
before they are lost. Similarly, writers keep diaries, artists keep sketch pads, and lyricists keep
tape-recorders handy to capture ideas whenever inspiration strikes.

Stage 4: Verification Stage

Ideas are generated at the insight stage. But coming up with ideas is one thing, and verifying
whether they are of any value is quite another. Assessing the usefulness of an idea requires
consciously thinking about it and subjecting it to evaluation and experimentation. At the
verification stage, tenacity may be critical, because other people often resist creative ideas or
quickly reject them as impractical.
Although the steps explained above suggest that creative process follows an order, creative
insight does not happen in such an orderly or neat fashion. For example, incubation may occur

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during verification. Besides, the process is often repetitive because initial ideas may be
unsatisfactory and require further vision. Also, incubation might very well occur during the
verification stage.

5.8. Methods of Enhancing Creativity

Creative ideas are known to emerge by some kind of mysterious bolt from the blue.
Nevertheless, OB experts have identified several techniques which help improve creative ability
among individual. One such technique is brainstorming. This technique is used to train
individuals to be more creative. In a brainstorming session, a group of people are encouraged to
exchange ideas freely in an atmosphere characterized by little censorship or criticism when
presented with problem. Group members try to generate as many alternative solutions as they
can. At this point, the quality of the ideas is not important, rather sheer number is emphasized.
Outlandish ideas are especially encouraged- they may turn out to be creative. Later, the recorded
proposals are refined and evaluated.
Another technique which helps promote creativity is grid analysis. In this technique, ideas or
materials of possible relevance to a problem are listed on two sides of a two-dimensional grid.
Then each possible combination of ideas is created and examined for its usefulness as a solution.
For example, a marketing firm may be interested in promoting alternative uses for its current
products. To uncover such novel uses, they may list their products on the horizontal axis, and
target customers or products that they do not manufacture, on the vertical axis. The resulting
combinations may suggest new market for their products, or the possible conversion of their
equipment of goods for the manufacture of other products.
Yet another technique of promoting creativity is lateral thinking, first developed by De Bono.
This technique is designed to help people escape from habitual mind patterns called vertical
thinking. With vertical thinking, each step in the cognitive process follows the previous step in
an unbroken sequence; it could be considered rationale because only relevant information is
considered at each stage. For example, within an organization, there are many habitual ways of
processing and analyzing information based on vertical thinking.
But lateral thinking poses a deliberate and provocative challenge to one’s preconceptions. It
emphasizes thinking in sideways mode and invites restructuring conventional ways of looking at
a problem. For example, a problem could be looked at from the angle of solution, and then go

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backwards to the beginning of the process and look at it afresh. It is not necessary to be correct at
each step of tackling a problem; in fact, one could go down the wrong alleyway, but there could
be weird logic in such a deviation because from this vantage point a better pathway may be
visible. One could also use what was once considered irrelevant information as a means to arrive
to a new ways of examining a problem.

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